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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



SCHEDULE 14A

(Rule 14a-101)14a−101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Securities Exchange Act of 1934 (Amendment No.    )



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American Public Education, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

American Public Education, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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March 28, 2019

Dear Fellow Stockholders:

We cordially invite you to join us for the 2019 Annual Meeting of Stockholders of American Public Education, Inc. to be held on Friday, May 10, 2019 at 7:30 a.m. EDT at the Gaylord National Resort and Convention Center, 201 Waterfront Street, National Harbor, Maryland 20745.

We are committed to remaining successful during a period of growing competition and challenges in for-profit education. In 2018, our net income increased 21.3% to $25.6 million, our first year-over-year increase in net

[GRAPHIC MISSING]income since 2012. In addition, as we continued to focus on stabilizing enrollment, we experienced the smallest percentage decrease in net course registrations since 2014 thanks to recent upgrades to our enrollment management processes, improved marketing efficiency, better student retention, and additional programs in STEM.

At the 2019 Annual Meeting, we will ask you to (1) elect the seven director nominees named in the attached proxy statement to our Board of Directors, (2) approve, on a non-binding advisory basis, executive compensation, and (3) ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the year ending December 31, 2019. We will also discuss any other business matters properly brought before the meeting.

You will find detailed information beginning on page 14 about the qualifications of our director nominees and why we believe they are the right people to represent your interests. Today, half of our independent directors are women, and our Board also has minority representation. We continue to evaluate Board composition, including the qualifications, skills, and diversity represented on our Board, and in 2018, further sharpened our focus on board composition by mandating consideration of the representation of certain characteristics, including diversity, on the Board.

As discussed in the Compensation Discussion and Analysis section, which begins on page 23, in 2018, we continued our commitment to compensation practices that align executive compensation to stockholder interests and to build on an executive compensation program that received a 97% approval from stockholders at last year’s annual meeting, including by increasing the percentage of equity awards that are tied to performance as opposed to being time-vested.

Finally, as discussed beginning on page 56, in 2018, following a rigorous competitive review process, we engaged Deloitte & Touche LLP as our new independent registered public accounting firm. Our Audit Committee has again selected Deloitte as our independent registered public accounting firm for the year ending December 31, 2019 and believes that the retention of Deloitte for the 2019 fiscal year is in the best interest of the Company and its stockholders.

On behalf of the American Public Education team, I would like to thank you for your continued support as we work to help our students advance in their current occupation, or prepare for their next career, and develop the competencies that enable them to make meaningful contributions to their profession and society. We look forward to your participation at the 2019 Annual Meeting.

Sincerely,

 

Dr. Wallace E. Boston, Jr.
President and Chief Executive Officer

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AMERICAN PUBLIC EDUCATION, INC.

111 W. Congress Street
Charles Town, West Virginia 25414

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

The 20162019 Annual Meeting of Stockholders of American Public Education, Inc. (the “Company”) will be held on June 17, 2016Friday, May 10, 2019 at 7:30 a.m. local time, at the Gaylord National Resort and Convention Center, 201 Waterfront Street, National Harbor, Maryland 20745, for the following purposes:

1.to elect the eight nominees for election to the Board of Directors asthe seven nominees set forth in the accompanying proxy statement;
2.to hold an advisory vote on the compensation of our named executive officers as disclosed in our Proxy Statement for the 20162019 Annual Meeting;
3.to ratify the appointment of RSM USDeloitte & Touche LLP (f/k/a McGladrey LLP) as the independent registered public accounting firm for the Company for the fiscal year ending December 31, 2016;2019; and
4.to consider any other matters that properly come before the Annual Meeting or any adjournment or postponement thereof.

Each outstanding share of American Public Education, Inc. common stock (NASDAQ:(Nasdaq: APEI) entitles the holder of record at the close of business on April 26, 2016,March 14, 2019, to receive notice of and to vote at the Annual Meeting or any adjournment or postponement of the Annual Meeting.

We are pleased to take advantage of Securities and Exchange Commission rules that allow us to furnish our proxy materials and our annual report to stockholders on the Internet. We believe that postingpost these materials on the Internet, which enables us to provide stockholders with the information that they need more quickly, while lowering our costs of printing and delivery and reducing the environmental impact of our Annual Meeting.

WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, WE URGE YOU TO VOTE YOUR SHARES BY INTERNET, TELEPHONE, OR BY SIGNING, DATING AND RETURNING THE PROXY CARD YOU WILL RECEIVE IF YOU REQUEST PRINTED MATERIALS. IF YOU CHOOSE TO ATTEND THE ANNUAL MEETING, YOU MAY STILL VOTE YOUR SHARES IN PERSON, EVEN THOUGH YOU HAVE PREVIOUSLY VOTED OR RETURNED YOUR PROXY BY ANY OF THE METHODS DESCRIBED IN OUR PROXY STATEMENT. IF YOUR SHARES ARE HELD IN A BANK OR BROKERAGE ACCOUNT, PLEASE REFER TO THE MATERIALS PROVIDED BY YOUR BANK OR BROKER FOR VOTING INSTRUCTIONS.

All stockholders are extended a cordial invitation to attend the meeting.

By Order of the Board of Directors,

[GRAPHIC MISSING] 

Dr. Wallace E. Boston, Jr.Thomas A. Beckett
Senior Vice President, General Counsel and Chief Executive OfficerSecretary
AprilMarch 28, 20162019

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Page
ABOUT THE ANNUAL MEETING
1
Purpose of the Annual Meeting
1
Proposals to be Voted Upon at the Annual Meeting
1
Recommendation of the Board
1
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting To Be Held on June 17, 2016May 10, 2019
2
Voting at the Annual Meeting
2
Quorum Requirement for the Annual Meeting
3
Required Votes
3
Solicitation of Proxies
3
CORPORATE GOVERNANCE STANDARDS AND DIRECTOR INDEPENDENCE
4
Corporate Governance MattersGuidelines and Code of Ethics
4
Certain Relationships and Related Person Transactions
4
Stock Ownership Guidelines
5
Restrictions on “Hedging”
6
Restrictions on “Pledging”
6
Board’s Role in Risk Oversight
6
COMPOSITION AND MEETINGS OF THE BOARD AND ITS COMMITTEES
8
Board Independence and Leadership Structure
8
6
Board’s Role in Risk Oversight
6
Meetings of theThe Board of Directors and its Committees
9
7
BOARD COMMITTEES AND THEIR FUNCTIONS8
Audit Committee8
Compensation Committee8
Nominating and Corporate Governance Committee9
DIRECTOR NOMINATIONS AND COMMUNICATION WITH DIRECTORS
12
10
Director Nomination Process
12
10
Contacting the Board of Directors
13
11
PROPOSAL NO. 1 — ELECTION OF DIRECTORS
14
11
Criteria for Evaluating Director Nominees
14
12
Required Vote and Board Recommendation2018 DIRECTOR COMPENSATION
21
15
2015 DIRECTOR COMPENSATION16
EXECUTIVE COMPENSATION
23
18
Compensation Discussion and Analysis
23
18
EXECUTIVE SUMMARY18
Building on a Strong Foundation
23
18
20152018 Compensation Program HighlightsMix
24
19
COMPENSATION PROGRAM OVERVIEW19
Compensation Program Philosophy and Objectives
24
19
Executive Compensation Best Practices
25
20
COMPETITIVE COMPENSATION AND PEER GROUP REVIEW21
Assessing Competitive Practice
27
22
ELEMENTS OF COMPENSATIONCEO Pay Ratio
39
23
2015 COMPENSATION DECISIONS24
OTHER COMPENSATION POLICIES AND PRACTICES28

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COMPENSATION COMMITTEE REPORT
40
30
COMPENSATION TABLES AND DISCLOSURES
41
31
Summary Compensation Table
41
31
20152018 Grants of Plan-Based Awards
42
32
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
42
33
20152018 Outstanding Equity Awards at Fiscal Year-End
44
35
Option Exercises and Stock Vested
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Nonqualified Deferred Compensation
46
38
Potential Payments Upon Termination or Change in Control
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38
Equity Compensation Plan Information
53
43
Compensation Committee Interlocks and Insider Participation43
PROPOSAL NO. 2 — ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
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44
PROPOSAL NO. 3 — RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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45
Principal Accountant Fees and Services
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46
Audit Committee’s Pre-Approval Policies and Procedures
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46
Additional Information Regarding Change of Independent Registered Accounting Firms
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AUDIT COMMITTEE REPORT
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47
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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BENEFICIAL OWNERSHIP OF COMMON STOCK
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48
GENERAL MATTERS
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50
Availability of Certain Documents
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50
Stockholder Proposals and Nominations
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50
Other Matters
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51
Directions to Annual Meeting
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[GRAPHIC MISSING] 

AMERICAN PUBLIC EDUCATION INC.

111 W. Congress Street
Charles Town, West Virginia 25414

PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS

To Be Held On June 17, 2016May 10, 2019

This Proxy Statement (the “Proxy Statement”) and the accompanying proxy are furnished to the stockholders of American Public Education, Inc. (hereinafter, “we,” “us,” “APEI” and the “Company”) in connection with the solicitation of proxies by the Board of Directors (the “Board”), to be voted at the Annual Meeting of Stockholders (the “Annual Meeting”) and at any adjournment or postponement of the Annual Meeting, which will be held at 7:30 a.m. local time on June 17, 2016,May 10, 2019, at the Gaylord National Resort and Convention Center, 201 Waterfront Street, National Harbor, Maryland 20745, for the purposes set forth in the accompanying Notice of Annual Meeting of Stockholders. The Board has made this Proxy Statement and the accompanying Notice of Annual Meeting available on the Internet.Internet at https://www.apei.com/resources/proxy-materials/. The Company mailed a Notice of Internet Availability of Proxy Materials to each of the Company’s stockholders entitled to vote at the Annual Meeting on or about AprilMarch 28, 2016.2019.

ABOUT THE ANNUAL MEETING

Purpose of the Annual Meeting

The purpose of the Annual Meeting is for our stockholders to consider and act upon the proposals described in this Proxy Statement and any other matters that properly come before the Annual Meeting or any adjournment or postponement thereof. In addition, management will report on the performance of the Company and respond to questions from stockholders.

Proposals to be Voted Upon at the Annual Meeting

At the Annual Meeting, our stockholders will be asked to consider and vote upon the following three proposals:

Proposal No. 1: To elect the eight nominees to the Board the seven nominees set forth in this Proxy Statement, each of whom will hold office until the next annual meeting of stockholders and until his or her successor is elected and qualified or until his or her earlier death, resignation or removal.
Proposal No. 2: To approve, byon an advisory vote,basis, the compensation of our named executive officers as disclosed in these proxy materials.
Proposal No. 3: To ratify the appointment of RSM USDeloitte & Touche LLP (“RSM”Deloitte”) (f/k/a McGladrey LLP) as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2016.2019.

In addition, any other matters that properly come before the Annual Meeting or any adjournment or postponement thereof will be considered. Management is presently aware of no other business to come before the Annual Meeting.

Recommendation of the Board

The Board recommends that you vote FOR each of the nominees to the Board (Proposal No. 1); FOR the approval of the compensation of our named executive officers (Proposal No. 2); and FOR the ratification of the appointment of RSMDeloitte as our independent registered public accounting firm for the fiscal year ending December 31, 20162019 (Proposal No. 3).

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Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting To Be Held on June 17, 2016

May 10, 2019

Pursuant to the “notice and access” rules adopted by the Securities and Exchange Commission (the “SEC”), we have elected to provide stockholders access to our proxy materials over the Internet. Accordingly, we sent a Notice of Internet Availability of Proxy Materials (the “Notice”) on Aprilor about March 28, 20162019 to all of our stockholders as of the close of business on April 26, 2016March 14, 2019 (the “Record Date”). The Notice includes instructions on how to access our proxy materials over the Internet and how to request a printed copy of these materials. In addition, by following the instructions in the Notice, stockholders may request to receive proxy materials in printed form by mail or electronically by e-mail on an ongoing basis.

Choosing to receive your future proxy materials by e-mail will save the Company the cost of printing and mailing documents to you and will reduce the impact of the Company’s annual meetings on the environment. If you choose to receive future proxy materials by e-mail, you will receive an e-mail next year with instructions containing a link to those materials and a link to the proxy voting site. Your election to receive proxy materials by e-mail will remain in effect until you terminate it.

Our Annual Report to Stockholders and this Proxy Statement are available athttp:https://phx.corporate-ir.net/phoenix.zhtml?c=214618&p=proxywww.apei.com/resources/proxy-materials/.

Voting at the Annual Meeting

Stockholders will be entitled to vote at the Annual Meeting on the basis of each share held of record at the close of business on the Record Date.

If on the Record Date you hold shares of our common stock that are represented by stock certificates or registered directly in your name with our transfer agent, American Stock Transfer & Trust Company (“AST”), you are considered the stockholder of record with respect to those shares, and AST is sending these proxy materials directly to you on our behalf. As a stockholder of record, you may vote in person at the meeting or by proxy.proxy via Internet, mail or telephone. Whether or not you plan to attend the Annual Meeting in person, you may vote over the Internet by following the instructions onin the Notice. If you request printed copies of the proxy materials by mail, you may also vote by submitting your vote by telephone or by signing and submitting your proxy card or by submitting your vote by telephone.card. Whether or not you plan to attend the Annual Meeting, we urge you to vote by way of the Internet, by telephone, or by filling out and returning the proxy card you will receive upon request of printed materials. If you submit a proxy but do not give voting instructions as to how your shares should be voted on a particular proposal at the Annual Meeting, your shares will be voted in accordance with the recommendations of ourthe Board stated in this Proxy Statement. Any proxy given pursuant to this solicitation may be revoked by the person giving it at any time before its use by (1) delivering a written notice of revocation addressed to American Public Education, Inc., Attn: Corporate Secretary, 111 W. Congress Street, Charles Town, West Virginia 25414, (2) submitting a duly executed proxy bearing a later date, (3) voting again by Internet or by telephone, or (4) attending the Annual Meeting and voting in person. Your last vote or proxy will be the vote or proxy that is counted. Attendance at the Annual Meeting will not cause your previously granted proxy to be revoked unless you vote or specifically so request.

If on the Record Date you hold shares of our common stock in an account with a brokerage firm, bank, or other nominee, then you are a beneficial owner of the shares and hold such shares in street name, and these proxy materials will be forwarded to you by that organization. As a beneficial owner, you have the right to direct your broker, bank, or other nominee on how to vote the shares held in their account, and the nominee has enclosed or provided voting instructions for you to use in directing it how to vote your shares. The nominee that holds your shares, however, is considered the stockholder of record for purposes of voting at the Annual Meeting. Because you are not the stockholder of record, you may not vote your shares in person at the Annual Meeting unless you bring to the Annual Meeting identification and a letter from your broker, bank or other nominee confirming your beneficial ownership of the shares.

Whether or not you plan to attend the Annual Meeting, we urge you to vote by following the voting instructions provided to you to ensure that your vote is counted.


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If you are a beneficial owner and do not vote, and your broker, bank or other nominee does not have discretionary power to vote your shares, your unvoted shares may constitute “broker non-votes.” SharesUnvoted shares that constitute broker non-votes will be counted for the purpose of establishing a quorum at the Annual Meeting. Voting results will be tabulated and certified by the inspector of elections appointed for the Annual Meeting. If you receive more than one Notice, it is because your shares are registered in more than one name or are registered in different accounts. Please follow the instructions on each Notice received to ensure that all of your shares are voted.

A list of stockholders of record as of the Record Date will be available for inspection during ordinary business hours at our offices located at 111 W. Congress Street, Charles Town, West Virginia 25414, from June 6, 2016April 30, 2019 to the date of our Annual Meeting. The list will also be available for inspection at the Annual Meeting.

Quorum Requirement for the Annual Meeting

The presence at the Annual Meeting, whether in person or by valid proxy, of the persons holding a majority of shares of common stock outstanding on the Record Date will constitute a quorum, permitting us to conduct our business at the Annual Meeting. On the Record Date, there were 16,056,31916,586,160 shares of common stock outstanding, held by 428479 stockholders of record. Abstentions (i.e., if you or your broker mark “ABSTAIN” on a proxy) and “broker non-votes” will be considered to be shares present at the meeting for purposes of a quorum. Broker non-votes occur when shares held by a broker for a beneficial owner are not voted with respect to a particular proposal and generally occur because the broker (1) does not receive voting instructions from the beneficial owner and (2) lacks discretionary authority to vote the shares. Brokers and other nominees have discretionary authority to vote on routine matters, such as the ratification of ouran independent public accounting firm for clients who have not provided voting instructions. However, without voting instructions from their clients, they cannot vote on “non-routine” proposals, including the election of directors the authorization of equity compensation plans, and matters related to executive compensation.

Required Votes

Election of Directors. Each director will be elected by the vote of the majority of the votes cast with respect to that director’s election. For purposes of electing directors, a majority of the votes cast means that the number of shares voted “FOR” a director’s election exceeds the number of the votes cast against that director’s election. Abstentions and broker non-votes are not taken into account in determining the outcome of the election of directors.

Advisory vote on executive compensation and ratification of our independent public accounting firm. The advisory vote on compensation of our named executive officers and the approval of the proposal to ratify the Audit Committee’s appointment of RSMDeloitte as our independent registered public accounting firm for the fiscal year ending December 31, 20162019 each require the affirmative vote of the holders of at least a majority of the shares of common stock present in person or represented by proxy at the Annual Meeting and entitled to vote. Broker non-votes are not taken into account in determining the outcome of these proposals, and abstentions will have the effect of a vote against these proposals.

Solicitation of Proxies

We will bear the cost of solicitation of proxies. This includes the charges and expenses of brokerage firms and others for forwarding solicitation material to beneficial owners of our outstanding common stock. We may solicit proxies by mail, personal interview, telephone or via the Internet through our officers, directors and other management employees, who will receive no additional compensation for their services.


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CORPORATE GOVERNANCE STANDARDS AND DIRECTOR INDEPENDENCE

The Board has adopted Corporate Governance Guidelines (the “Guidelines”), a Code of Business Conduct and Ethics (the “Code of Ethics”), and a Policy for Related Person Transactions and other policies as part of our corporate governance practices and in accordance with rules of the SEC and the listing standards of The NASDAQNasdaq Stock Market (“NASDAQ”Nasdaq”).

The Guidelines, Code of Ethics, and Policy for Related Person Transactions are reviewed periodically by our Nominating and Corporate Governance Matters

Committee, and changes are recommended to the Board for approval as appropriate. In September 2017, the Board updated and consolidated the Code of Ethics. The amended Code of Ethics is more user friendly for employees and enhances guidelines for employees, officers, and directors on compliance with law and Company policy. The amended Code of Ethics did not relate to or result in any waiver, explicit or implicit, of any provision of the previous Code of Ethics. In December 2018, the Board updated the Guidelines to clarify certain provisions and to provide for more rigorous consideration of Board composition, including making it mandatory to consider the representation of certain characteristics on the Board, as well as to provide for additional characteristics, including diversity, for the Board to consider. The revisions also provide for additional restrictions on outside directorships held by our directors.

Corporate Governance Guidelines and Code of Ethics

The Guidelines set forth a framework to assist the Board in the exercise of its responsibilities. The Guidelines cover, among other things, the composition and certain functions of the Board, director independence, stock ownership by our non-employee directors, management succession and review, Board committees, the selection of new directors, and director expectations.

The Code of Ethics covers, among other things, compliance with laws, rules and regulations, conflicts of interest, corporate opportunities, confidentiality, protection and proper use of companyCompany assets, and the reporting process for any illegal or unethical conduct. The Code of Ethics is applicable to all of our officers, directors and employees. The Code of Ethics includes provisions that are specifically applicable to our Chief Executive Officer, Chief Financial Officer and other Principal Officers (as defined in the Code of Ethics).

Any waiver of the Code of Ethics for our directors, executive officers, or Principal Officers may be made only by ourthe Board and will be promptly disclosed as may be required by law, regulation, or rule of the SEC or NASDAQNasdaq listing standards. If we further amend our Code of Ethics or waive the Code of Ethics with respect to our Chief Executive Officer, Chief Financial Officer or other Principal Officers, we will post the amendment or waiver on our corporate website, which iswww.americanpubliceducation.comwww.apei.com. The information on our corporate website is not incorporated by reference into this Proxy Statement.

The Guidelines and Code of Ethics are each available in the Governance section of our corporate website. The Guidelines, Code of Ethics, and Policy for Related Person Transactions are reviewed periodically by our Nominating and Corporate Governance Committee, and changes are recommended to our Board for approval as appropriate.

Certain Relationships and Related Person Transactions

Policies and Procedures for Related Person Transactions

As a supplement to and extension of our Code of Ethics, ourthe Board has adopted a Policy for Related Person Transactions pursuant to which our Nominating and Corporate Governance Committee, another independent committee of ourthe Board or the full Board, must give prior consent before we may enter into a related person transaction with our executive officers, directors, nominees for director and principal stockholders, including their immediate family members and affiliates. Any request for us to enter into a related person transaction with an executive officer, director, nominee for director, principal stockholder or any of such persons’ immediate family members or affiliates must first be presented to our Nominating and Corporate Governance Committee for review, consideration and approval. A related person transaction is a transaction in which the Company is or will be a participant and in which a related person has or will have a direct or indirect material interest, other than (i) a transaction involving $120,000 or less when aggregated with all related transactions, (ii) a transaction involving compensation to an executive officer that is approved by the Board or the Compensation Committee, (iii) a transaction involving compensation to a director or director nominee that is approved by the Board, the Compensation Committee or the Nominating and Corporate Governance Committee, and (iv) any other transaction that is not required to be reported pursuant to Item 404(a) of

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Regulation S-K under the Securities Exchange Act of 1934. All of our directors, executive officers, and employees are required to report to our Nominating and Corporate Governance Committee any such related person transaction. In approving or rejecting the proposed agreement, our Nominating and Corporate Governance Committee shall consider the facts and circumstances available and deemed relevant to the Nominating and Corporate Governance Committee, including, but not limited to the risks, costs and benefits to us, the terms of the transaction, the availability of other sources for comparable services or products, and, if applicable,


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the impact on a director’s independence. Our Nominating and Corporate Governance Committee shall approve only those agreements that, in light of known circumstances, are in, or are not inconsistent with, our best interests, as our Nominating and Corporate Governance Committee determines in the good faith exercise of its discretion. Under the policy, if we should discover related person transactions that have not been approved, the Nominating and Corporate Governance Committee will be notified and will determine the appropriate action, including ratification, rescission or amendment of the transaction.

Related Person Transactions

Harry T. Wilkins retired from his position as the Chief Executive Officer of National Education Seminars, Inc., which we refer to as Hondros College of Nursing, and as the Chief Development Officer of the Company as of December 18, 2015. Mr. Wilkins agreed to consult with the Company after his retirement for a period of 18 months, particularly to work on the transition to the next chief executive officer of Hondros College of Nursing. In connection with Mr. Wilkins’s retirement, he and the Company entered into a letter agreement dated November 6, 2015 to formalize the terms of his departure. This agreement provides that, as compensation for his consulting services, Mr. Wilkins will continue to vest in his outstanding equity awards for an 18-month period after his retirement. Such continued vesting is valued at approximately $246,000.

There were no other related person transactions in 2015.2018.

Stock Ownership Guidelines

To further align the interest of our executive officers and directors with the interestinterests of our stockholders, and after evaluation of best practices and consultation by the Compensation Committee with Willis Towers Watson Public Limited Company (“Willis Towers Watson”), its independent consultant, ourthe Board has implemented stock ownership guidelines applicable to our executive officers and directors. Each executive officer is expected to hold shares of common stock with an aggregate value greater than or equal to a multiple of the executive officer’s base salary as set forth below:

the Company’s Chief Executive Officer — six times base salary;
the Company’s Executive Vice Presidents — two times base salary; and
the Company’s Senior Vice Presidents — one timestime base salary.

Each of the Company’s non-employee directors is expected to hold shares of common stock with an aggregate value greater than or equal to at least three times the amount of the annual retainer paid to non-employee directors for service on the Board, excluding additional committee retainers, if any.

Under the stock ownership guidelines, common stock held directly, including shares of common stock held in a separate brokerage account or in a 401(k) account, and common stock held indirectly (e.g., by a spouse, minor dependent, or a trust for the benefit of the executive or director, or the executive’s or director’s spouse or minor dependent), count toward satisfaction of the levels set forth in the guidelines. For purposes of the guidelines, the “value” of the common stock is based on the closing price of the common stock on the day on which a determination under the guidelines is being made. The determination of compliance with the guidelines is measured annually on the last business day of each year.

Our executives and non-employee directors are expected to comply with these guidelines within five years of the date the person first became an executive or non-employee director, as applicable. If an executive officer has not achieved the stock ownership level as outlined above by that date, the executive officer will be required to retain 50% of the net shares of common stock acquired pursuant to restricted stock or optionequity awards made after the adoption of the guidelines until such levels are achieved. “Net shares” are those shares that remain after shares are sold or withheld to pay withholding taxes and/or the exercise price of stock options (if applicable). As of December 31, 2018, all of our executive officers and non-employee directors were in compliance with the stock ownership guidelines to the extent required.

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The stock ownership guidelines superseded the existing policy applicable to our non-employee directors. That policy provided that directors were expected to hold a number of shares of our common stock equivalent to one-half of all shares of restricted stock they receive.

Restrictions on “Hedging”

We have adopted a policy prohibiting our directors, officers, and employees from engaging in short sales, transactions in derivative securities (including put and call options), or other forms of hedging and monetization transactions, such as zero-cost collars, equity swaps, exchange funds, and forward sale contracts, that allow the holder to limit or eliminate the risk of a decrease in the value of our securities. We have adopted this policy in order to align the interests and objectives of individuals subject to the policy with those of our stockholders.

Restrictions on “Pledging”

We have adopted a policy prohibiting our directors and officers from holding our securities in margin accounts, pledging our securities as collateral or maintaining an automatic rebalance feature in savings plans, deferred compensation or deferred fee plans. This prohibition is to avoid sales of our securities on behalf of an individual related to margin calls, loan defaults, and automatic rebalances, which may occur when the individual has material nonpublic information regarding the Company.

Board Independence and Leadership Structure

Our Board believes, and our Guidelines require, that a substantial majority of its members should be independent directors. In addition, the respective charters of the Audit, Compensation and Nominating and Corporate Governance Committees currently require that each member of such committees be independent directors. Consistent with NASDAQ’s independence criteria, the Board has affirmatively determined that all of our directors are independent, with the exception of Dr. Boston, who is our President and Chief Executive Officer. NASDAQ’s independence criteria includes a series of objective tests, such as that the director is not an employee of the Company and has not engaged in various types of business dealings with us. In addition, as further required by NASDAQ rules, the Board has made a subjective determination as to each independent director that no relationship exists that, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, the Board reviewed and discussed information provided by the directors and management with regard to each director’s business and personal activities as they may relate to us and our management.

In accordance with our Guidelines, the independent members of our Board will hold at least two “executive session” meetings each year. If the chairperson of the Board is not an independent director, an independent chairperson will be selected for each executive session. In general, these meetings are intended to be used as a forum to discuss the annual evaluation of the Chief Executive Officer’s performance, the annual review of the Chief Executive Officer’s plan for management succession and such other topics as the independent directors deem necessary or appropriate.

Our Guidelines specify that the Board shall select its chairperson based on the Board’s determination of what is then in the best interests of the Company. Historically, the Company has split the positions of the Chairperson of the Board and Chief Executive Officer because we believe that this structure is appropriate given the differences between the two roles in our management structure. Our Chief Executive Officer, among other duties, is responsible for setting the strategic direction for the Company and for the day-to-day leadership and performance of the Company, while the Chairperson of the Board, among other responsibilities, provides guidance to the Chief Executive Officer, and presides over meetings of the full Board.

Board’s Role in Risk Oversight

Our management is responsible for managing risks in our business, including by developing processes to monitor and control risks. The Board views its role as one of oversight and of responsibility for setting a tone that risk management should be properly integrated with our strategy


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and culture. The Board focuses on understanding management’s risk management processes, the effectiveness of those processes, and the way in which management proactively manages risks. The Board regularly meets with our management, particularly our Chief Executive Officer, Chief Financial Officer, Chief Technology Officer and our General Counsel to receive updates on how management is assessing and managing risk in particular functional areas of our business. The Board and its committees also request and receive regular reports from management on particular areas of risk.risk, such as cybersecurity or threats to technology infrastructure.

The Board is assisted in carrying out its oversight of risks by the Committees.its committees. In this regard, each of the charters of the Board’s committees specifically address issues of risk. At the request of the full Board, from time to time the Nominating and Corporate Governance Committee may discuss or examine in more depth specific risk areas and request presentations and information from management for that purpose. The Nominating and Corporate Governance Committee considers and makes recommendations on how the Board is approaching its role of risk oversight. The Audit Committee reviews and assesses the qualitative aspects of financial reporting and our processes to manage financial and financial reporting risk. The Audit Committee regularly reports its findings to the Board.

While the AuditNominating and Corporate Governance Committee and the Nominating and Corporate GovernanceAudit Committee have primary responsibility for assisting the Board with its risk oversight responsibilities, the Compensation Committee also assists the Board with risk oversight. When establishing executive compensation and director compensation and in its role in implementing incentive compensation plans, the Compensation Committee considers whether compensation practices properly take into account an appropriate risk-reward relationship or encourage unnecessary and excessive risks that threaten the value of the Company. The Board has concluded on the recommendation of the Compensation Committee, that the Company’s compensation policies and practices are not reasonably likely to have a material adverse effect on the Company; this conclusion has been confirmed by the Compensation Committee.

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The following table highlights the roles of the Board and each committee in risk oversight:

The Board
•   Assesses management’s risk management processes, the effectiveness of those processes, and the way
     in which management proactively manages risks.
•   Receives and reviews regular reports provided by management, and monitors risks that have been
     delegated to its three standing committees.
•    Considers risks that relate to the reputation of our Company and the general industry in which we      operate.
Nominating and Corporate
Governance Committee
Audit Committee
Compensation Committee
•   Assists the Board in
     overseeing management’s
     development and
     application of its approach for
     the assessment and
     management of strategic,
     operational, regulatory,
     information, external and other
     significant risks in the business
     of the Company.

•   Periodically communicates with
     the other committees of the
     Board with regard to their
     current risk oversight activities.
•   Discusses the Company’s
     major financial and other
     financial reporting risk
     exposures.

•   Discusses the steps
     management has taken to
     monitor and control such      exposures, including the
     Company’s risk assessment
     and risk management policies.

•   Receives and reviews the
     annual report from
     management regarding the
     manner in which the Company
     is assessing and managing the      Company’s exposure to
     financial and other financial
     reporting risks.
•   Considers whether the
     Company’s compensation
     policies and practices properly
     take into account an
     appropriate risk-reward
     relationship or encourage
     unnecessary and excessive
     risks.

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COMPOSITION AND MEETINGS OF THE BOARD AND ITS COMMITTEES

The following table details certain basic information on our directors, the composition of the Board and its standing committees, and the number of meetings held during the year ended December 31, 2018:

Name and
Principal Occupation
Age
Director
Since
Independent
Committee Memberships
AUD
COM
NCG
Eric C. Andersen
Partner, Peak Equity
57
2012
X
X(1)
X
 
Wallace E. Boston, Jr.
President and Chief Executive Officer of the Company
64
2004
 
 
 
 
Barbara G. Fast(2)
President and Chief Executive Officer, BGF Enterprises LLC
65
2009
X
 
C
X
Jean C. Halle
Independent Consultant
60
2006
X
C(1)
 
X
Barbara L. Kurshan
Senior Fellow and Innovation Advisor, University of Pennsylvania, Graduate School of Education
70
2014
X
X
 
X
Timothy J. Landon
Partner, Ergo Ventures & Advisers
56
2009
X
X
 
C
William G. Robinson, Jr.
President, Broadgate Human Capital, LLC
54
2016
X
 
X
X
2018 Meetings
 
 
Board: 13
8
5
5
AUD
Audit Committee
COM
Compensation Committee
NCG
Nominating and Corporate Governance Committee
X
Committee Member
C
Committee Chair
(1)Audit Committee Financial Expert
(2)Chairperson of the Board

Board Independence and Leadership Structure

The Board believes, and our Guidelines require, that a substantial majority of its members should be independent directors. In addition, the respective charters of the Audit, Compensation, and Nominating and Corporate Governance Committees currently require that each member of such committees be independent directors. Consistent with Nasdaq’s independence criteria, the Board has affirmatively determined that all of our directors are independent, with the exception of Dr. Boston, who is our President and Chief Executive Officer. Nasdaq’s independence criteria includes a series of objective tests, such as that the director is not an employee of the Company and has not engaged in various types of business dealings with us. In addition, as further required by Nasdaq rules, the Board has made a subjective determination as to each independent director that no relationship exists that, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, the Board reviewed and discussed information provided by the directors and management with regard to each director’s business and personal activities as they may relate to us and our management.

In accordance with our Guidelines, the independent members of the Board will hold at least two “executive session” meetings each year. If the Chairperson of the Board is not an independent director, an independent chairperson will be selected for each executive session. In general, these meetings are intended to be used as a forum to discuss the annual evaluation of the Chief Executive Officer’s performance, the annual review of the Chief Executive Officer’s plan for management succession, and such other topics as the independent directors deem necessary or appropriate.

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Our Guidelines specify that the Board shall select its Chairperson based on the Board’s determination of what is then in the best interests of the Company. Historically, the Company has split the positions of the Chairperson of the Board and Chief Executive Officer because we believe that this structure is appropriate given the differences between the two roles in our management structure. Our Chief Executive Officer, among other duties, is responsible for implementing the strategic direction for the Company and for the day-to-day leadership and performance of the Company, while the Chairperson of the Board, among other responsibilities, provides guidance to the Chief Executive Officer, and presides over meetings of the full Board. Currently, Dr. Boston serves as our Chief Executive Officer and MG (Ret) Fast serves as the Chairperson of the Board.

The Board of Directors and its Committees

Information concerning the Board and its three standing committees is set forth below. Each Board committee currently consists only of directors who are not employees of the Company and who are “independent” as defined in NASDAQ’sNasdaq’s rules.

The Board and its committees meet regularly throughout the year, and also hold special meetings and act by written consent from time to time. The Board held a total of eight13 meetings during the fiscal year ended December 31, 2015.2018. During this time, all of our current directors attended at least 75% of the aggregate number of meetings held by the Board and all committees of the Board on which such director served (during the period that such director served). The Board does not have a formal policy with respect to Board member attendance at annual meetings of stockholders.stockholders, but all members of the Board are encouraged to attend. Our 20152018 Annual Meeting of Stockholders was attended by all of our current directors who were then serving, with the exception of Westley Moore.serving.

The Board has three standing committees: the Audit Committee; the Compensation Committee; and the Nominating and Corporate Governance Committee. The charters for the Audit, Compensation, and Nominating and Corporate Governance Committees can be accessed electronically on the Committees page“Governance — Governance & Ethics Documents” section of our corporate website, which iswww.americanpubliceducation.comwww.apei.com. The information on our corporate website is not incorporated by reference into this Proxy Statement.

The Board conducts, and the Nominating and Corporate Governance Committee oversees, an annual evaluation of the Board’s operations and performance in order to enhance its effectiveness. Recommendations resulting from this evaluation are made by the Nominating and Corporate Governance Committee to the full Board for its consideration.


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BOARD COMMITTEES AND THEIR FUNCTIONS

The following table describes which directors serve on each Each committee also conducts an annual evaluation of its own performance and charter, and makes recommendations as necessary to either management, the Board’s standing committees.Nominating and Corporate Governance Committee, or the full Board, as applicable, as a result of these evaluations.

NameAudit
Committee		Compensation
Committee		Nominating and
Corporate
Governance
Committee
Eric C. AndersenXX
Wallace E. Boston, Jr.
Barbara G. Fast(2)X(1)X
Jean C. HalleX(1)
Barbara KurshanX
Timothy J. LandonXX(1)
Westley MooreXX
Timothy T. WeglickiXX

(1)Chair of the Committee.
(2)Chairperson of the Board.

Audit Committee

The Board has established a separately designated standing Audit Committee in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, which met six times during 2015.1934. The Audit Committee is responsible, among its other duties and responsibilities, for overseeing our accounting and financial reporting processes, the audits of our financial statements, the qualifications of our independent registered public accounting firm, and the performance of our internal audit function and our independent registered public accounting firm. The Audit Committee reviews and assesses the qualitative aspects of our financial reporting, our processes to manage financial reporting risk, and our compliance with significant applicable legal, ethical and regulatory requirements. The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of our independent registered public accounting firm.

The members of our Audit Committee are Ms. Halle, who serves as chair of the Committee, Mr. Andersen, Mr. Landon, and Mr. Weglicki. OurDr. Kurshan. Each member of the Audit Committee is able to read and understand fundamental financial statements, including our balance sheet, statement of operations, and statement of cash flows.

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The Board has determined that Ms. Halle and Mr. Andersen are each an “Audit Committee financial expert,” as that term is defined under the SEC rules implementing Section 407 of the Sarbanes-Oxley Act of 2002. OurThe Board has determined that each member of our Audit Committee is independent under NASDAQ’sNasdaq’s listing standards and each member of our Audit Committee is independent pursuant to Rule 10A-3 of the Securities Exchange Act of 1934.

Compensation Committee

The Compensation Committee is responsible, among its other duties and responsibilities, for establishing the compensation and benefits of our Chief Executive Officer and other executive officers, monitoring compensation arrangements applicable to our Chief Executive Officer and other executive officers in light of their performance, effectiveness and other relevant considerations, and administering our equity incentive plans. ThePursuant to our Bylaws, the Compensation Committee met six times during 2015. may create one or more subcommittees, each subcommittee to consist of one or more members of the Compensation Committee, and may delegate any or all of its powers and authority to those subcommittees.

The members of our Compensation Committee are MG (Ret) Fast, who serves as chair of the Committee, Mr. Andersen, and Mr. Moore. OurRobinson. The Board has determined that each member of our Compensation Committee meets NASDAQ’sNasdaq’s independence requirements for approval of the compensation of our Chief Executive Officer and other executive officers.

The Compensation Committee has the sole authority to retain and terminate any compensation consultant to assist in evaluating executive officer compensation. In 2015,2018, the Compensation Committee retained Willis Towers Watson directly as an outside compensation consultant to assist in evaluating our compensation programs, as it has since 2007. The Compensation Committee assessed Willis Towers Watson’s independence, considering all relevant factors, including those set forth in NASDAQNasdaq rules. In connection with this assessment, the Committee considered Willis Towers Watson’s work and determined that it raised no conflicts of interest. Willis Towers Watson does no


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work for the Company other than work that is authorized by the Compensation Committee or its chairperson. The Compensation Committee used information provided to it by Willis Towers Watson in connection with making 20152018 compensation determinations. Willis Towers Watson also advised the Compensation Committee on the use of a peer group and applicable survey data for comparative purposes. The consultant’s role in recommending the amount or form of executive compensation paid to the Company’s named executive officers during 20152018 is described in the “Compensation Discussion and Analysis — Compensation Program Philosophy and Objectives — Competitive—Competitive Compensation and Peer Group Review” section below.

The Compensation Committee considers the results of the annual advisory vote on the compensation of our named executive officers. See “Proposal No. 2” below to review this year’s proposal. In 2015,2018, approximately 96%97% of the stockholder votes cast on this proposal were voted in favor of our executive compensation proposal.

The Compensation Committee works closely with our Chief Executive Officer, Dr. Boston, on compensation decisions and has delegated certain aspects of the annual incentive plans for the other executive officers, including the named executive officers, to Dr. Boston. For a discussion of Dr. Boston’s role in determining or recommending the executive compensation paid to the Company’s named executive officers during 2015,2018, see the “Compensation Discussion and Analysis — Role of Executives in Executive Compensation Decisions” section below. None of our other executive officers participates in any deliberations related to the setting of executive compensation with the exception of Peter W. Gibbons, our Senior Vice President, Chief Administrative Officer, who provides support to the Compensation Committee and facilitates the requests for information received from the independent consultant.compensation.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee is responsible for recommending candidates for election to the Board. The Committee met four times during 2015. The Committee is also responsible, among its other duties and responsibilities, for making recommendations to the Board or otherwise acting with respect to corporate governance policies and practices, including board size and membership qualifications, recommendations with respect to director resignations tendered in the event a director fails to achieve a majority of votes cast in favor of his or her election, new director orientation, committee structure and membership, succession planning for our Chief Executive Officer and other key executive officers, and communications with stockholders. In addition, the

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Nominating and Corporate Governance Committee assists the Board in understanding and overseeing management’s processes for the assessment and management of non-financial risks of the Company and the steps that management has taken to monitor and control exposure to such risks. The members of our Nominating and Corporate Governance Committee are Mr. Landon, who serves as chair of the Committee, MG (Ret) Fast, Dr. Kurshan, Mr. Moore and Mr. Weglicki. OurRobinson. The Board has determined that each member of our Nominating and Corporate Governance Committee meets NASDAQ’sNasdaq’s independence requirements for directors that make director nominations.

Ad Hoc Committees

From time to time, the Board may create ad hoc committees for specific purposes. In 2017, the Board created a temporary new committee of the Board called the Operations Committee, which continued its work in 2018. The Operations Committee was formed in light of Dr. Boston, the Company’s President and Chief Executive Officer, taking on an additional role as President of our subsidiary, American Public University System, and the increased workload for Dr. Boston in that additional role. The Operations Committee was tasked with providing the Board with additional oversight, on a regular basis, of the Company’s strategic and diversification efforts, talent management and other personnel matters, and other areas of the Company’s operations. Mr. Robinson was the only member of the Operations Committee during 2018. The Operations Committee met 48 times during the course of 2018. In 2018, the Board created a temporary new committee of the Board called the Transaction Review Committee. The Transaction Review Committee was tasked with providing the Board with additional oversight, on a regular basis, of the Company’s strategic and diversification efforts. MG (Ret) Fast, Mr. Andersen and Ms. Halle were the only members of the Committee during 2018. The Transaction Review Committee met 15 times during the course of 2018.


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DIRECTOR NOMINATIONS AND COMMUNICATION WITH DIRECTORS

Director Nomination Process

The Nominating and Corporate Governance Committee recommends, and the Board nominates, candidates to stand for election as directors. Stockholders may also nominate persons to be elected as directors. If a stockholder wishes to nominate a person for election as director, he or she must follow the procedures contained in our Bylaws and satisfy the requirements of Regulation 14A of the Securities Exchange Act of 1934. For a stockholder’s nomination of a person to stand for election as a director at thean annual meeting of stockholders to be considered, our Corporate Secretary must receive such nominations at our principal executive offices not more than 120 days, and not less than 90 days, before the anniversary date of the precedingprior year’s annual meeting, except that if the annual meeting is set for a date that is not within 30 days before or 60 days after such anniversary, the nomination must be received no later than the later of the 90th day prior to such annual meeting or the close of business on the tenth day following the notice or public disclosure of the meeting. Each submission must include the following information:

the name and address of the stockholder who intends to make the nomination and the name and address of the person or persons to be nominated;
a representation that the stockholder is a holder of record of Company capital stock entitled to vote at the annual meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons;
if applicable, a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons, naming such person or persons, pursuant to which the nomination is to be made by the stockholder;
such other information regarding each nominee to be proposed by such stockholder as would be required to be included in a proxy statement filed under the SEC’s proxy rules if the nominee had been nominated, or intended to be nominated, by the Board;
if applicable, the consent of each nominee to serve as a director if elected;
a statement whether each nominee, if elected, intends to tender an irrevocable resignation in the form required by the incumbent directors under the Bylaws; and
such other information that the Board may request in its discretion.

The Board may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as one of its directors.

Each director will be elected by the vote of the majority of the votes cast with respect to that director’s election, provided, however, that if, as of the tenth day preceding the date we first mail notice of the meeting for such meeting to our stockholders, the number of nominees exceeds the number of directors to be elected, which we refer to as a “Contested Election”,Election,” the directors shall be elected by the vote of a plurality of the votes cast. Our Bylaws require that the Board or a committee of the Board shall not nominate any incumbent director who, as a condition to such nomination, does not submit a conditional and, in the case of an uncontested election, irrevocable letter of resignation to the Chairperson of the Board. If an incumbent nominee is not elected in an uncontested election, the Nominating and Corporate Governance Committee will promptly consider such director’s conditional resignation and make a recommendation to the Board regarding the resignation. Each incumbent director nominated for election to the Board at the Annual Meeting as described under “Proposal No. 1” below has submitted the conditional letter of resignation as required by our Bylaws.

In the event an incumbent director fails to receive a majority of the votes cast in an election that is not a Contested Election, the Nominating and Corporate Governance Committee, or such other committee designated by the Board pursuant to our Bylaws, shall make a recommendation to the Board as to whether to accept or reject the resignation of such incumbent director, or whether other action should be taken. The Board shall act on the resignation, taking into account the Committee’s recommendation, and publicly disclose (by a press release and filing an appropriate disclosure with


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the SEC) its decision regarding the resignation and, if

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such resignation is rejected, the rationale behind the decision, within 90 days following certification of the election results. The Committee in making its recommendation and the Board in making its decision each may consider any factors and other information that it considers appropriate and relevant.

Additional information regarding requirements for stockholder nominations for next year’s annual meeting is described in this Proxy Statement in the section titled “General Matters — Stockholder Proposals and Nominations” below.

Contacting the Board of Directors

Stockholders wishing to communicate with ourthe Board may do so by writing to the Board, the Chairperson of the Board, or the non-employee members of the Board as a group, at:

American Public Education, Inc.
111 W. Congress Street
Charles Town, West Virginia 25414
Attn: Corporate Secretary

Complaints or concerns relating to our accounting, internal accounting controls or auditing matters will be referred to members of the Audit Committee. Other correspondence will be referred to the relevant individual or group. All correspondence is required to prominently display the legend “Board Communication” in order to indicate to the Corporate Secretary that it is a communication subject to our policy and will be received and processed by the Corporate Secretary’s office. Each communication received by the Corporate Secretary will be copied for our files and in most cases will be promptly forwarded to the addressee. The Board has requested that certain items not related to the Board’s duties and responsibilities be excluded from the communications so forwarded under the policy. In addition, the Corporate Secretary is not required to forward any communication that the Corporate Secretary, in good faith, determines to be frivolous, unduly hostile, threatening, illegal or similarly unsuitable. However, the Corporate Secretary will maintain a list of each communication subject to this policy that is not forwarded and, on a quarterly basis, will deliver the list to the Chairperson of the Board. In addition, each communication subject to this policy that is not forwarded because it was determined by the Corporate Secretary to be frivolous shall nevertheless be retained in our files and made available at the request of any member of the Board to whom such communication was addressed.

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PROPOSAL NO. 1 — ELECTION OF DIRECTORS

OurThe Board is currently comprised of eightseven members. Our nominees for the election of directors at the Annual Meeting include sevensix independent non-employee directors and our Chief Executive Officer. Each director is elected to serve a one-year term, with all directors subject to annual election. At the recommendation of the Nominating and Corporate Governance Committee, the Board has nominated the following persons to serve as directors for the term beginning at the Annual Meeting on June 17, 2016:May 10, 2019: Eric C. Andersen, Dr. Wallace E. Boston, Jr., MG (Ret) Barbara G. Fast, Jean C. Halle, Dr. Barbara L. Kurshan, Timothy J. Landon, Westley Moore and William G. Robinson, Jr. All of the nominees are currently serving on the Board, with the exception of Mr. Robinson. Mr. Weglicki, who currently serves on the Board, will not be standing for election at the Annual Meeting.Board.

It is intended by the persons named as proxies that proxiesProxies received in response to this solicitation will be voted FOR the election of each nominee named in this section unless otherwise stated in the proxy or in the case of a broker non-vote with respect to the proposal. Proxies submitted for the Annual Meeting can only be voted for those nominees named in this Proxy Statement. If, however, any director nominee is unable or unwilling to serve as a nominee at the time of the Annual Meeting, the persons named as proxies may vote for a substitute nominee designated by the Board, or the Board may reduce the size of the Board. Each nominee has consented to serve as a director if elected, and the Board does not believe that any nominee will be unwilling or unable to serve. Each director will hold office until his or her successor is duly elected and is qualified or until his or her earlier death, resignation or removal.


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Criteria for Evaluating Director Nominees

The Board provides strategic direction to the Company and oversees the performance of the Company’s business and management. The Nominating and Corporate Governance Committee periodically identifies and reviews with the Board desired skills and attributes of both individual Board members and the Board overall within the context of current and future needs. The Nominating and Corporate Governance CommitteeAmong the Committee’s responsibilities is responsible for developing the development of general criteria, subject to approval by the full Board, for use in identifying, evaluating and selecting qualified candidates for election or re-election to the Board. The Nominating and Corporate Governance Committee reviews the appropriate skills and characteristics required of directors in the context of the current composition of the Board, our operating requirements and the long-term interests of our stockholders. It may use outside consultants to assist in identifying candidates. AmongIn determining whether to recommend candidates to serve on the characteristicsBoard, the Committee may consider areconsiders (i) whether candidates meet regulatory and independence requirements, (ii) the collective knowledgeBoard’s overall composition in light of current and diversityfuture needs, (iii) the past performance of professional skillsincumbent directors, (iv) and background, experience in relevant industries, age and geographic background in addition towhether candidates have the qualities of integrity, judgment, acumen, and the time and ability to work professionally and effectively with other Board members and management and make a constructive contribution to the Board. In reviewing the composition of the Board, the Committee must consider professional skills and background, experience in relevant industries, diversity, age, tenure, and geographic background. The Committee considers candidates submitted by directors and management, as well as candidates recommended by stockholders, which are evaluated in the same manner as other candidates identified to it. Final approval of director candidates is determined by the full Board.

The Board has determined that all of our director nominees are qualified to serve as directors of the Company. Set forth below are some of the experiences, qualifications, attributes, and skills possessed by these nominees.

QUALIFICATIONS AND
EXPERIENCE
Andersen
Boston
Fast
Halle
Kurshan
Landon
Robinson
Business Strategy Experience
•
•
•
•
•
•
•
Finance, Investment and Accounting Experience
•
•
•
Corporate Governance Experience
•
•
•
Operational Experience
•
•
•
•
•
•
•
Education / Academia Experience
•
•
•
Risk Management Experience
•
•
•
Sales and Marketing Background
•
•
•
Talent Management Expertise
•
•
Government / Military Service
•
Technology / Cybersecurity Expertise
•
•
•
•
•
•
•

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Information for each nominee for director, theirincluding names, ages as of April 28, 2016March 8, 2019, terms of office, principal occupations, and other information about each nomineebusiness experience is shownset forth below. In addition, the biographies offor each of the nominees below containnominee, we have included additional information regarding the experiences, qualifications, attributes or skills that caused the Nominating and Corporate Governance Committee and the Board to determine that the person should serve as a director for the Company.

ERIC C. ANDERSEN
 


Director Since June 2012
   • Audit Committee
   • Compensation Committee
Age 57
Biography

Mr. Andersen has served on the Board since June 2012. Mr. Andersen is a partner with Peak Equity, a lower middle market private equity firm that specializes in making investments in enterprise software companies. Prior to joining Peak, Mr. Andersen was a partner at Milestone Partners, a private equity firm, from 2011 to 2015. From 2006 to 2011 Mr. Andersen served as a Managing Director of private equity firm Silver Lake Partners, before which he worked in the consulting industry with IBM Business Consulting Services (BCS), serving as Managing Partner, Asia Pacific responsible for IBM’s business solutions and business process outsourcing business across Asia Pacific, and Managing Partner, Distribution Sector responsible for IBM’s consulting business in the pharmaceutical, retail, consumer goods and travel/transportation industries. Before working with IBM, Mr. Andersen was a senior partner at PwC Consulting, where he served in a variety of positions. Mr. Anderson currently serves on the boards of directors of several private companies.
Skills and Qualifications

• Experience as a principal in several private equity firms
• Expertise in outsourcing, information technology and software, and    international operations

   
Name Age Principal Occupation Director Since
Eric C. Andersen 54 Partner, Peak Equity 2012
Wallace E. Boston, Jr. 61 President and Chief Executive Officer of the Company 2004
Barbara G. Fast 62 Senior Vice President, CGI Federal 2009
Jean C. Halle 57 Independent Consultant 2006
Barbara Kurshan 67 Executive Director of Academic Innovation, University of Pennsylvania, Graduate School of Education 2014
Timothy J. Landon 53 Chief Executive Officer, Aggrego, LLC 2009
Westley Moore 37 Independent Consultant 2013
William G. Robinson, Jr. 51 Executive Vice President and Chief Human Resources Officer of Sabre Corporation N/A

Eric C. Andersen has served on our Board since June 2012. Mr. Andersen also serves on the board of NWHW Holdings, Inc. as the APEI representative. Mr. Andersen is a partner with Peak Equity, a lower middle market private equity firm that specializes in making investments in enterprise software companies. Prior to joining Peak, Mr. Andersen was a partner at Milestone Partners, a private equity firm, from 2011 to 2015. From 2006 to 2011 Mr. Andersen served as a Managing Director of private equity firm Silver Lake Partners, before which he worked in the consulting industry with IBM Business Consulting Services (BCS), serving as Managing Partner, Asia Pacific responsible for IBM’s business solutions and business process outsourcing business across Asia Pacific, and Managing Partner, Distribution Sector responsible for IBM’s consulting business in the pharmaceutical, retail, consumer goods and travel/transportation industries. Before working with IBM, Mr. Andersen was a senior partner at PwC Consulting, where he served in a variety of positions. Mr. Andersen currently serves on the board of directors of several private companies.

We believe that Mr. Andersen’s qualifications to serve on our board include his experience as a principal in several private equity firms, as well as his expertise in outsourcing, business processes and international operations.15


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DR. WALLACE E. BOSTON, JR.
 

Director Since June 2004
   • President and Chief
      Executive Officer
Age 64
Biography

Dr. Bostonjoined us in September 2002 as Executive Vice President and Chief Financial Officer of American Public University System (“APUS”) and since June 2004 has served as President and Chief Executive Officer and a member of the Board of Directors of APEI. Since October 2017, Dr. Boston has also served as President of APUS. Dr. Boston previously served as President and Chief Executive Officer of APUS from June 2004 to July 2016. From August 2001 to April 2002, Dr. Boston served as Chief Financial Officer of Sun Healthcare Group. From July 1998 to May 2001, Dr. Boston served as Chief Operating Officer and, later, President of NeighborCare, Inc. From February 1993 to May 1998, Dr. Boston served as Vice President of Finance and later, Senior Vice President of Acquisitions and Development of Manor Healthcare Corporation (now HCR ManorCare). From November 1985 to December 1992, Dr. Boston served as Chief Financial Officer of Meridian Healthcare.
Skills and Qualifications

• Service as our Chief Executive Officer since 2004
• Service as our Chief Financial Officer between 2002 and 2004
• Pivotal leadership to the Company in some of our most significant
   events, including our accreditation by the Higher Learning Commission
   in 2006, our 2007 initial public offering, the receipt by American Public
   University System of the 2009 Ralph E. Gomory Award for Quality
   Online Education, also known as the Sloan C Award, our
   reaccreditation in 2011, and our 2013 acquisition of National
   Education Seminars, Inc.

Dr. Wallace E. Boston, Jr.joined us in September 2002 as Chief Financial Officer and, since June 2004, has served as President, Chief Executive Officer and a member of our Board. Dr. Boston also serves on the Board of Directors of National Education Seminars, Inc., which we refer to as Hondros College of Nursing, on the Board of Trustees of American Public University System (APUS) and on the Boards of Directors of Fidelis Education, Inc. and NWHW Holdings, Inc. From August 2001 to April 2002, Dr. Boston served as Chief Financial Officer of Sun Healthcare Group. From July 1998 to May 2001, Dr. Boston served as Chief Operating Officer and, later, President of NeighborCare Pharmacies. From February 1993 to May 1998, Dr. Boston served as Vice President — Finance and, later, Senior Vice President of Acquisitions and Development of Manor Healthcare Corporation, now Manor Care, Inc. From November 1985 to December 1992, Dr. Boston served as Chief Financial Officer of Meridian Healthcare. Dr. Boston currently serves on the Board of the Presidents’ Forum of Excelsior College, the Board of Therapeutic Research Center, and the Board of Overseers of the University of Pennsylvania Graduate School of Education.

We believe that Dr. Boston’s qualifications to serve on our Board include his service as our Chief Executive Officer since 2004 and his service as our Chief Financial Officer between 2002 and 2004. Dr. Boston’s leadership has been pivotal to the Company in some of our most significant events, including our accreditation by the Higher Learning Commission in 2006, our 2007 initial public offering, the receipt by American Public University System of the 2009 Ralph E. Gomory Award for Quality Online Education, also known as the Sloan-C Award, our reaccreditation in 2011, and our 2013 acquisition of National Education Seminars, Inc., which we refer to as Hondros College of Nursing.

Major General (Retired) Barbara G. Fast has served on our Board since May 2009, was appointed Vice-Chairperson of the Board in August 2014 and was appointed Chairperson in June 2015. MG (Ret) Fast also serves as Chairperson of the Board of Directors Hondros College of Nursing. She is the President and CEO of BGF Enterprises LLC. She has served as Senior Vice President, Strategic Engagements, CGI Federal, since June 2014. Prior to that she served as Senior Vice President, Army Defense and Intelligence Programs, CGI Federal, beginning in November 2012. Prior to that she served as Vice President of Operations and Intelligence, CGI Federal, from June 2011. Previously she was the Vice President of Cyber and Information Solutions at The Boeing Company, which she joined in August 2008. MG (Ret) Fast retired from the Army in July 2008 after a 32-year career. Her most recent posts included: Deputy Director, Army Capabilities and Requirements Center, Training and Doctrine Command, from July 2007 until June 2008; Deputy and, later, Commanding General for the United States Army Intelligence Center and Fort Huachuca, Arizona, from August 2004 until June 2007; and Director of Intelligence, Multinational Forces — Iraq (Baghdad, Iraq) from July 2003 until July 2004. MG (Ret) Fast currently serves on the board of directors of several government and private organizations.

We believe that MG (Ret) Fast’s qualifications to serve on our Board include her extensive experience and achievements in the U.S. Military, national and defense intelligence, and cyber security, culminating in over 32 years of military service until her retirement as a Major General, her service as Commanding General of Fort Huachuca, and her current work in industry and not-for-profit organizations.

Jean C. Halle has served on our Board since March 2006. Ms. Halle also serves on the board of Second Avenue Software as the APEI representative. Since 2010, Ms. Halle has worked as an independent consultant. From September 2013 until May 2014 she served as the Acting Chief Operating Officer for Curiosityville, a digital early learning company. From 2002 to 2010, Ms. Halle was the Chief Executive Officer of Calvert Education Services, a provider of accredited distance education programs and educational support services. From 1999 to 2001, Ms. Halle was the Chief Financial Officer and Vice President of New Business Development for Times Mirror Interactive, a digital media subsidiary of the former Times Mirror Company. From 1986 to 1999, Ms. Halle held a number of positions with The Baltimore Sun Company, including Vice President of New Business Development, Chief Financial Officer and Vice President of Finance, President of Homestead Publishing, a subsidiary of The Baltimore Sun Company, and Director of Strategic Planning. From 1983 to 1986, Ms. Halle was the Chief Financial Officer and Vice President of Finance for Abell16


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MAJOR GENERAL (RETIRED) BARBARA G. FAST
 

Director Since May 2009
   • Chairperson of the Board
   • Compensation Committee
      (Chair)
   • Nominating and Corporate
      Governance Committee
Age 65
Biography

MG (Ret) Fast has served on the Board since May 2009, was appointed Vice-Chairperson of the Board in August 2014 and was appointed Chairperson in June 2015. MG (Ret) Fast also serves as Chairperson of the board of directors of Hondros College of Nursing. She is the President and CEO of BGF Enterprises LLC, a management and technology consulting firm. She served as Senior Vice President, Strategic Engagements, CGI Federal, an information technology consulting and services company, from June 2014 to September 2016. Prior to that she served as Senior Vice President, Army Defense and Intelligence Programs, CGI Federal, beginning in November 2012. Prior to that she served as Vice President of Operations and Intelligence, CGI Federal, from June 2011. Previously she was the Vice President of Cyber and Information Solutions at The Boeing Company, which she joined in August 2008. MG (Ret) Fast retired from the Army in July 2008 after a 32-year career. Her most recent posts included: Deputy Director, Army Capabilities and Requirements Center, Training and Doctrine Command, from July 2007 until June 2008; Deputy and, later, Commanding General for the United States Army Intelligence Center and Fort Huachuca, Arizona, from August 2004 until June 2007; and Director of Intelligence, Multinational Forces — Iraq (Baghdad, Iraq) from July 2003 until July 2004. Since October 2018, MG (Ret) Fast has served as a director of Beacon Roofing Supply, Inc. (Nasdaq: BECN), a distributor of roofing and building materials.
Skills and Qualifications

• Extensive experience and achievements in the U.S. Military, national
   and defense intelligence, and cybersecurity
• 32 years of military service until her retirement as a Major General
• Service as Commanding General of Fort Huachuca
• Profit and loss responsibility for sizable business units of other public    companies
• Other public company board experience

Communications, and Assistant Treasurer of A.S. Abell Company, the former parent company of The Baltimore Sun Company. From 1979 to 1983, Ms. Halle was a Senior Management Consultant with Deloitte, Haskins and Sells, now Deloitte, an international accounting and professional services firm. Ms. Halle currently serves on the President’s Advisory Council for Stevenson University, the Board of Trustees of Catholic Distance University, the Advisory Board of Loyola University School of Education and the advisory boards of two private companies.

We believe that Ms. Halle’s qualifications to serve on our Board include her multifaceted experiences in online education as Chief Executive Officer of Calvert Education Services, in media as Chief Financial Officer and Vice President of New Business Development for Times Mirror Interactive, and in financial consulting as a Senior Management Consultant at an international accounting and professional services firm. Ms. Halle was also a 2011 National Association of Corporate Directors Board Leadership Fellow, having completed a comprehensive program of study for experienced corporate directors spanning leading practices for boards and committees.

Dr. Barbara “Bobbi” Kurshan has served on our Board since August 2014. Dr. Kurshan is the Executive Director of Academic Innovation and a Senior Fellow in Education at the Graduate School of Education at the University of Pennsylvania, a position she has held since 2012. Dr. Kurshan also provides consulting services through Educorp Consultants Corporation, a company she has owned and operated since 1989. Dr. Kurshan received her MS in Computer Science and her Ed.D. in Curriculum and Instruction with concentration in Educational Technology from Virginia Tech University and has had a nearly thirty-year career as both an academic and award-winning entrepreneur. She currently serves on the board of directors of two private organizations.

We believe that Dr. Kurshan’s qualifications to serve on our Board include her extensive background and leadership experience for nearly thirty years in the field of higher education.

Timothy J. Landon has served on our Board since January 2009. Since September 2013, Mr. Landon has served as the Chief Executive Officer of Aggrego, LLC, a venture capital-backed startup focused on building content and ad networks for mobile distribution in the United States, Western Europe, the Caribbean, Central America and Asia Pacific. Aggrego’s investors are Wrapports, LLC and Digicel Group Limited. From June 2012 until September of 2013, Mr. Landon served as President of Wrapports Ventures, the venture capital and incubator division of Wrapports, LLC, which disrupts and transforms local media using technology. From 2008 to 2012, Mr. Landon served as Chief Executive Officer of Landon Company, where he focused on early stage angel investing and consulting for private equity, venture capital and large traditional and online media companies. Mr. Landon worked at Tribune Company for more than 20 years, and served in a variety of positions within the Tribune organization, including as President of Tribune Interactive, Inc. from March 2004 until February 2008, where he was responsible for overall interactive and classified advertising strategy, technology and operations for the Tribune Company, and had leadership roles in starting CareerBuilder.com, Classified Ventures (the holding company of Apartments.com and Cars.com), and other online businesses. In December 2008, the Tribune Company filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code.

We believe that Mr. Landon’s qualifications to serve on our Board include his extensive experience in starting, building and managing internet-focused media businesses over the last seventeen years. He brings significant knowledge of online marketing and online business models, including knowledge based on his position as President of Tribune Interactive and his experience at CareerBuilder.com, which has direct relevance and applicability to our business.

Westley Moore has served on our Board since June 2013. Since 2014, Mr. Moore’s principal occupation has been as the founder and CEO of BridgeEdU. He is also an author, public speaker and television personality through his wholly owned business entities. In television, Mr. Moore has been the Executive Producer and host of the PBS miniseries on returning veterans “Coming Back with Wes Moore.” During 2011, he hosted the television program “Beyond Belief” on the Oprah Winfrey Network and served as a news analyst for NBC. Prior to that, in 2010, he published a bestselling book, The Other Wes Moore. From 2007 to 2011, he was a securities broker with Citigroup. From 2006 to 2007, Mr. Moore worked at the U.S. Department of State as a White House


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JEAN C. HALLE
 

Director Since March 2006
   • Audit Committee (Chair)
Age 60
Biography

Ms. Halle has served on the Board since March 2006. Since 2010, Ms. Halle has worked as an independent consultant. From September 2013 until May 2014 she served as the Acting Chief Operating Officer for Curiosityville, a digital early learning company. From 2002 to 2010, Ms. Halle was the Chief Executive Officer of Calvert Education Services, a provider of accredited distance education programs and educational support services. From 1999 to 2001, Ms. Halle was the Chief Financial Officer and Vice President of New Business Development for Times Mirror Interactive, a digital media subsidiary of the former Times Mirror Company. From 1986 to 1999, Ms. Halle held a number of positions with The Baltimore Sun Company, including Vice President of New Business Development, Chief Financial Officer and Vice President of Finance, President of Homestead Publishing, a subsidiary of The Baltimore Sun Company, and Director of Strategic Planning. From 1983 to 1986, Ms. Halle was the Chief Financial Officer and Vice President of Finance for Abell Communications, and Assistant Treasurer of A.S. Abell Company, the former parent company of The Baltimore Sun Company. From 1979 to 1983, Ms. Halle was a Senior Management Consultant with Deloitte, Haskins and Sells, now Deloitte, an international accounting and professional services firm. Ms. Halle previously served on the advisory board of Stevenson University and the board of the Loyola University School of Education. Ms. Halle currently serves on the Board of Trustees of Catholic Distance University, the Maryland State Board of Education, and the advisory board of a private company.
Skills and Qualifications

• Experience in online education as Chief Executive Officer of Calvert    Education Services

• Experience in media as Chief Financial Officer and Vice President of
   New Business Development for Times Mirror Interactive

• Experience in financial consulting as a Senior Management Consultant
   at an international accounting and professional services firm

• Ms. Halle was a 2011 National Association of Corporate Directors
   Board Leadership Fellow, having completed a comprehensive program
   of study for experienced corporate directors spanning leading
   practices for boards and committees

Fellow to Secretary of State Condoleezza Rice. Previously, Mr. Moore served as a paratrooper and Captain in the U.S. Army from 2005 to 2006, which included a tour of combat duty in Afghanistan. Mr. Moore currently serves as a trustee of the Baltimore Community Foundation, a member of the Board of Overseers of The Network for Teaching Entrepreneurship, and a trustee fellow of Phi Theta Kappa Foundation.18

We believe that Mr. Moore’s qualifications to serve on our Board include his experience in media and communications, as well as his policy and military experience.TABLE OF CONTENTS

DR. BARBARA “BOBBI” L. KURSHAN
 

Director Since August 2014
   • Audit Committee
Age 70
Biography

Dr. Kurshan has served on the Board since August 2014. Dr. Kurshan is the Innovation Advisor (previously Executive Director of Academic Innovation) and a Senior Fellow in Education at the Graduate School of Education at the University of Pennsylvania, a position she has held since 2012. Dr. Kurshan also provides consulting services through Educorp Consultants Corporation, a company she has owned and operated since 1989. Dr. Kurshan received her MS in Computer Science and her Ed.D. in Curriculum and Instruction with concentration in Educational Technology from Virginia Tech University and has had a nearly thirty-year career as both an academic and award-winning entrepreneur. She currently serves on the boards of directors of two private organizations.
Skills and Qualifications

• Extensive background and leadership experience for nearly thirty years
   in the field of higher education
• Entrepreneurial experience building companies
TIMOTHY J. LANDON
 

Director Since January 2009
   • Audit Committee
Age 56
Biography

Mr. Landon has served on the Board since January 2009. Since August 2017, Mr. Landon has served as a partner of Ergo Ventures & Advisers, a venture investing and consulting firm. From September 2013 to August 2017, Mr. Landon served as the Chief Executive Officer of Aggrego, LLC, a venture capital-backed startup focused on building content and ad networks for mobile distribution in the United States, Western Europe, the Caribbean, Central America, and Asia Pacific. From June 2012 until September of 2013, Mr. Landon served as President of Wrapports Ventures, the venture capital and incubator division of Wrapports, LLC, which disrupts and transforms local media using technology. From 2008 to 2012, Mr. Landon served as Chief Executive Officer of Landon Company, where he focused on early stage angel investing and consulting for private equity, venture capital and large traditional and online media companies. Mr. Landon worked at Tribune Company for more than 20 years, and served in a variety of positions within the Tribune organization, including as President of Tribune Interactive, Inc. from March 2004 until February 2008, where he was responsible for overall interactive and classified advertising strategy, technology and operations for the Tribune Company, and had leadership roles in starting CareerBuilder.com, Classified Ventures (the holding company of Apartments.com and Cars.com), and other online businesses.
Skills and Qualifications

• Extensive experience in starting, building and managing
   internet-focused media businesses over the last eighteen years
• Significant knowledge of online marketing and online business models,
   including knowledge based on his position as President of Tribune
   Interactive and his experience at CareerBuilder.com, which has direct
   relevance and applicability to our business

William G. Robinson, Jr. does not currently serve on our Board, but was recommended for nomination by Mr. Weglicki, who met Mr. Robinson when Mr. Weglicki was on the Board of Coventry Health Care where Mr. Robinson was an executive officer. Mr. Robinson is executive vice president and chief human resources officer of Sabre Corporation, where he is responsible for leading Sabre’s global human resources organization, including talent management, organizational leadership and culture. Prior to joining Sabre in December 2013, Mr. Robinson served as the senior vice president and chief human resources officer at Coventry Health Care, a diversified managed health care company that then had 14,000 employees, from 2012 to 2013. From 2010 to 2011, Mr. Robinson served as senior vice president for human resources at Outcomes Health Information Solutions, a healthcare analytics and information company specializing in the optimization and acquisition of medical records. Prior to that, from 1990 to 2010, he worked for General Electric, where he held several human resources leadership roles in diverse industries including information technology, healthcare, energy and industrial. Most recently, he was the human resources leader within the GE Enterprise Solutions division where he led a global team in an organization of 20,000 employees in 200 locations worldwide.19

We believe that Mr. Robinson’s qualifications to serve on our Board include his significant experience and leadership in human resources and his experience as an executive officer of other public companies.TABLE OF CONTENTS

Required Vote and Board Recommendation

In order to be elected as a director, a nominee must be elected by a majority of the votes cast with respect to such nominee at the Annual Meeting. A majority of the votes cast means that the number of shares of common stock voted FOR a nominee must exceed 50% of the votes cast with respect to that nominee. Abstentions and broker non-votes are not taken into account in determining the outcome of the election of directors. Stockholders do not have the right to cumulate their votes in the election of directors. If an incumbent nominee in an uncontested election such as the election to be held at the Annual Meeting fails to be elected, the incumbent nominee will continue in office and the Board will consider whether to accept the nominee’s earlier submitted conditional resignation. If the resignation is not accepted the incumbent nominee may continue in office until a successor is elected.

WILLIAN G. ROBINSON, JR.
 

Director Since June 2016
   • Compensation Committee
   • Nominating and Corporate       Governance Committee
Age 54
Biography

Mr. Robinson has served on the Board since June 2016. Since October 2018, Mr. Robinson has served as president of Broadgate Human Capital, LLC, a human resources consulting firm. From December 2013 through September 2017, Mr. Robinson served as executive vice president and chief human resources officer of Sabre Corporation, a travel technology company, where he was responsible for leading Sabre’s global human resources organization, including talent management, organizational leadership, and culture. Prior to joining Sabre in December 2013, Mr. Robinson served as the senior vice president and chief human resources officer at Coventry Health Care, a diversified managed health care company that then had 14,000 employees, from 2012 to 2013. From 2010 to 2011, Mr. Robinson served as senior vice president for human resources at Outcomes Health Information Solutions, a healthcare analytics and information company specializing in the optimization and acquisition of medical records. Prior to that, from 1990 to 2010, he worked for General Electric, where he held several human resources leadership roles in diverse industries including information technology, healthcare, energy, and industrial, including as the human resources leader within the GE Enterprise Solutions division, where he led a global team in an organization of 20,000 employees in 200 locations worldwide.
Skills and Qualifications

• Significant experience and leadership in human capital management
• Experience as an executive officer of other public companies

THE BOARD RECOMMENDS A VOTE FOR ELECTION OF EACH OF THE EIGHTSEVEN NOMINATED DIRECTORS.


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20152018 DIRECTOR COMPENSATION

Under ourOur non-employee director compensation policy which was established and is periodically revised following consultation with Willis Towers Watson. In December 2016, Willis Towers Watson presented to the Compensation Committee information on non-employee director compensation, providing comparative information on the same peer group that the Compensation Committee uses for executive compensation, as well as general industry levels. Following consultation with Willis Towers Watson, the Compensation Committee recommended, and the Board approved, increases in director compensation, effective as of January 1, 2017. The Board determined that these increases were appropriate because the annual compensation for the Company’s non-employee directors was previously near the bottom of our peer group and below the median of the general industry survey prepared by Willis Towers Watson. The Board also considered that there had not been any increases to director compensation for three years. After consultation with Willis Towers Watson that confirmed that director compensation was well within the median range for an organization of our size and scope that there had been no changes in the market that would suggest the Committee consider changing director compensation, no changes were made to director compensation for 2018.

Pursuant to the non-employee director compensation policy, directors receive an annual retainer of $40,000.$60,000. The chairs of the Audit, Compensation, and Nominating and Corporate Governance Committees receive additional annual retainers of $11,000, $8,500$15,000, $10,000 and $5,500,$8,000, respectively, and the non-employee Chairperson of the Board receives an additional annual retainer of $30,000.$50,000. The Chairperson is not entitled to receive any additional annual retainers for also serving as chair of any of the Board’s standing committees.

The annual retainers are payable in quarterly installments, and each director may, before the beginning of the applicable year, elect to receive his or her annual retainer in common stock having the same value as the portion of the annual retainer to be paid, calculated as of the close of business on the first business day of the year. In connection with our annual meeting of stockholders, our non-employee director compensation policy also provides for an annual grant to each director of restricted stock having a value of $55,000$75,000 on the grant date. The restricted stock grant vests on the earlier of the one-year anniversary of the date of grant or immediately prior to the next year’s annual meeting of stockholders.

From time to time the Board may create ad hoc committees that are in addition to the regular responsibilities of Board members, and are therefore viewed as requiring time and energy outside of what the annual retainer is intended to cover. In 2017, the Board created the Operations Committee, for which it determined additional compensation was appropriate. The compensation for the Operations Committee was set at a maximum of $2,500 per day, at a rate of (i) $2,500 for each day spent on site at our headquarters in Charles Town, West Virginia and (ii) for time spent remotely, $312.50 per every hour of committee activity.

We also reimburse all directors for travel and other necessary business expenses incurred in the performance of their services for us and extend coverage to them under the directors’ and officers’ indemnity insurance policies.

Some directors may also be asked to serve as a representative of ourthe Board on the boards of our wholly-ownedwholly owned subsidiaries or in entities in which we have invested. A non-employee director who serves on the board of a wholly-owned subsidiaryone of our wholly owned subsidiaries as a representative of ourthe Board receives a payment of $2,500 ($3,000 for a director serving as chair) per in-person meeting, or $750 ($1,000 for a director serving as chair) for telephonic meetings, but with no more than one payment per day. Non-employee directors who serve on the board of entities in which we have invested are compensated by those companies consistent with their policies, provided that our Compensation Committee or full Board of Directors reviews the compensation arrangements.

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The following table sets forth information regarding compensation earned by our non-employee directors during 2015:2018:

Name(1)
Fees Earned or
Paid in Cash
($)(2)
Stock
Awards
($)(3)
Total
($)
Eric C. Andersen(4)
$
60,000
 
$
74,992
 
$
134,992
 
Barbara G. Fast
$
124,000
 
$
74,992
 
$
198,992
 
Jean C. Halle
$
75,000
 
$
74,992
 
$
149,992
 
Barbara L. Kurshan
$
60,000
 
$
74,992
 
$
134,992
 
Timothy J. Landon
$
68,000
 
$
74,992
 
$
142,992
 
William G. Robinson
$
170,878
 
$
74,992
 
$
245,870
 
   
Name(1) Fees Earned
or Paid in
Cash ($)(2)		 Stock
Awards ($)(3)		 Total ($)
Eric C. Andersen(4) $40,000  $54,981  $94,981 
Barbara G. Fast $68,896  $54,981  $123,877 
Jean C. Halle $50,996  $54,981  $105,977 
Barbara Kurshan $40,000  $54,981  $94,981 
Timothy J. Landon $45,518  $54,981  $100,499 
Westley Moore $40,000  $54,981  $94,981 
Timothy T. Weglicki $53,379  $54,981  $108,360 

(1)See the Summary Compensation Table in the “Compensation Tables and Disclosures” section of this Proxy Statement for disclosure related to Dr. Boston, who is one of our named executive officers (“NEOs”) as of December 31, 2015.2018.
(2)Mr. Weglicki elected to receive his entire 2015 annual retainer in fully-vested shares of common stock, and received a total of 1,477 shares. Mr. Landon and Ms. Halle each elected to receive a portion of his or her 2015 annual retainer in fully-vested shares of common stock, and received a total of 630 and 142 shares, respectively. Mr. Weglicki served as Chairperson of the Board until the June 2015 annual meeting of stockholders, at which time MG (Ret) Fast became Chairperson of the Board. For MG (Ret) Fast, amount includes $9,000$14,000 received as compensation for her service at the request of the APEI Board of Directors as Chairperson of the Board of APEI’s subsidiary National Education Seminars, Inc., which operates as Hondros College of Nursing. This $14,000 was paid by National Education Seminars, Inc. Mr. Landon elected to receive 50% of his 2018 annual retainer in fully vested shares of common stock, and which operates as Hondros Collegereceived a total of Nursing.1,318 shares.

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(3)The aggregate grant date fair value of the restricted stock awards in 20152018 was $25.91,$43.60, as computed in accordance with FASB ASC Topic 718. MG (Ret) Fast and Dr. Kurshan elected to defer receipt of the vested shares until the earlier of the date of separation from service and June 1, 2020.
(4)For Mr. Andersen, fees earned exclude $19,451 received an additional $30,000 as compensation for his service on the Board of Directors of NWHW Holdings, Inc., which was paid by NWHW Holdings, Inc., and which service was at the request of the APEI Board of Directors. Mr. Andersen ceased to serve on the Board of Directors of NWHW Holdings, Inc. in May 2018.

As of December 31, 2015,2018, there were no exercisable or unexercisable option awards held by our current non-employee directors. The aggregate number of unvested stock awards outstanding held as of that date by our current non-employee directors were as follows:

Name
Stock Awards
NameStock Awards
Eric C. Andersen
1,720
2,122
Barbara G. Fast
1,720
2,122
Jean C. Halle
1,720
2,122
Barbara L. Kurshan
1,720
2,122
Timothy J. Landon
1,720
2,122
Westley Moore
William G. Robinson
1,720
2,122
Timothy T. Weglicki2,122


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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

EXECUTIVE SUMMARY

This Compensation Discussion and Analysis describes our executive compensation program and decisions for 2015.2018. This section details the compensation framework applied by the Compensation Committee and, in particular, our compensation philosophy and objectives, elements of compensation, compensation decisions, and the link between executive pay and performance. TheOur named executive officers or NEOs,(“NEOs”) for 20152018 are:

Wallace E. Boston, Jr., our Chief Executive Officer and President;President, and President of American Public University System (“APUS”);
Richard W. Sunderland, Jr., our Executive Vice President and Chief Financial Officer;
Karan Powell,
Patrik Dyberg, our Executive Vice President and Provost of American Public University System;Chief Technology Officer;
Carol S. Gilbert, our Executive Vice President, Programs and Marketing;
Peter W. Gibbons,Thomas A. Beckett, our Senior Vice President, General Counsel and Chief Administrative Officer;Secretary; and
Harry T. Wilkins,
Amy N. Panzarella, our former ExecutiveSenior Vice President, Human Resources and Chief Development Officer of American Public Education, Inc. and Chief Executive OfficerCommunity Affairs.

Consistent with the design of our executive compensation program, the compensation realized by our NEOs was higher in 2018 than 2017 as a result of our improved performance. Our NEOs received above target payouts under our annual incentive plan tied to financial performance and additional payouts tied to satisfaction of individual “management by objective” performance measures (“MBOs”). Dr. Boston’s payout under our annual incentive plan in 2018 was 129% of his target annual incentive opportunity. Based on our free cash flow, the performance measure for our performance-based deferred stock units (“PSUs”), performance awards were earned by our NEOs at the 147% level.

Building on a Strong Foundation

APEI provides online and on-campus postsecondary education through two subsidiary institutions. APUS provides online postsecondary education to approximately 81,400 adult learners (as of December 31, 2018) and has a history of serving the academic needs of the military, military-affiliated and public service communities. National Education Seminars, Inc., which we refer to as Hondros College of Nursing who retired on(“HCN”), provides nursing education to approximately 2,100 students (as of December 18, 2015.

Building on a Strong Foundation

31, 2018) across five campuses in Ohio.

APEI’s American Public University System (APUS) was foundedWe continued to provide military and public service communities with access to affordable, quality academic programs. In 2013, APEI acquired Hondros College of Nursing (HCON), which educates nurses at four Ohio campuses and online. Today, the two institutions together serve approximately 99,700 students.

Particularly at APUS, we facedface a number of challenges at APUS in 2015,2018 recruiting students, including increasedchallenges associated with competition from both traditionalfor students, the continuing effects of prior periods of decreased registrations, and online universities,ongoing declines in new student course registrations resulting in decreased returning student net course registrations. Despite these and other challenges, attractingthe year-over-year rate of decline in net course registrations for APUS was 1.4% for 2018, the lowest rate of decline since 2013. We believe this improvement is an indicator that our efforts to attract and retain students with greater college readiness on average are working, and directly reflects the implementationleadership of a new admissions assessment, as well as continued uncertainty in the military’s Voluntary Education Program. As a result, net course registrations for APUS declined 7.1% year-over-year for 2015. Despite these and other challenges, we believe our positive reputation in military-affiliated communities helped drive a 9% year-over-year increase in net course registrations by students using Veteran’s Administrations benefits in 2015.named executive officers.

As we help our students prepare to advance their careers, APEI is committed to remaining successful during a period of growing competition and the challenges of the current economic environment.in for-profit education. We continue to focus on driving improvements in our core services — focusing on academic quality, student outcomes, and the learning experience — not only to potentially reach more students and improve our business results, but also to enroll students with greater college readiness on average and help them achieve success. Strong and motivated leadership is and will be critical to achieving our goals.


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20152018 Compensation Program Highlights

Mix

The tablechart below summarizes significantshows the breakdown of the components of Dr. Boston’s target compensation decisions relativeopportunity for 2018. As discussed in the overview section below, the breakdown of Dr. Boston’s target compensation opportunity reflects our focus on variable compensation tied to our NEOs for fiscal year 2015:performance, with Dr. Boston’s fixed base salary representing only 22% of his total compensation opportunity, with annual and long-term incentives tied to financial, individual and equity performance representing the remainder.

Compensation Highlights for 2015
Continued focus on market levels[GRAPHIC MISSING]Base salaries remained at or below the market 50th percentile.
No payment under our annual incentive plan[GRAPHIC MISSING]Based on the design of our annual incentive program, our executive officers did not receive any annual incentive payouts for 2015.
Increased the percentage of equity awards tied to performance for the CEO and all of the named executive officers or NEOs[GRAPHIC MISSING]For 2015, we increased the use of performance-based shares in our overall equity mix from 35% to 40% of the value of an NEO’s long-term incentive award in order to further link the compensation of our executives with performance.

 

COMPENSATION PROGRAM OVERVIEW

Compensation Program Philosophy and Objectives

Our compensation programs for our NEOs are designed to attract, incentivize, retain, and reward the talent that we need to maintain and strengthen our position in higher education and to achieve our business objectives.

Elements of our Compensation Program Philosophy
Variable Cash Compensation
[GRAPHIC MISSING]
We believe in using variable cash compensation to motivate and reward performance for our NEOs.
Focus on Corporate Goals
[GRAPHIC MISSING]
We strive to provide compensation that is directly related to the achievement of our corporate goals, which we measure through financial earnings, individual management objectives and free cash flow goals.
Carefully Monitor External Market Practices
[GRAPHIC MISSING]
We monitor market practices so that our programs reflect the realities of the competitive market to ensure we are paying for performance. At the same time, we must also ensure we can attract the top talent necessary to drive results through our diversified business strategy.


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Executive Compensation Best Practices

Below we highlightHighlighted below are certain executive compensation practices that we employ in order to align executive compensation with stockholder interests. Also listed below are certain compensation practices that we do not employ because we do not believe they would serve our stockholders’ long-term interests.

What We Do
How We Do It
We Pay for Performance
[GRAPHIC MISSING]
We tie a significant portion of our executives’ annual pay opportunity to objective performance metrics and continue to monitor our pay mix to ensure the performance-based portion is consistent with that of our peers.
We Target Pay Competitively
[GRAPHIC MISSING]
We seek to target compensation within a competitive range of the market median and only deliver greater compensation when warranted by actual superior performance. Conversely, we deliver lower compensation when performance results do not meet our threshold expectations.

We review our pay and performance alignment compared to our peers annually to understand where our programs are working and where we can continue to make improvements.
We Enforce Executive Stock Ownership Guidelines
[GRAPHIC MISSING]
Each of our executives is expected to own shares of the Company’s common stock with a value ranging from one to six times the executive’s base salary, depending on position.
We Utilize Meaningful Vesting Conditions for Equity Awards
[GRAPHIC MISSING]
Equity awards, including performance-based awards, have three-year ratable vesting periods from the date of grant.
We Impose a “Clawback“Clawback Policy”
[GRAPHIC MISSING]
We can recover any performance-based cash or equity award where, as a result of an accounting restatement, the performance goals were later determined not to have been achieved. In addition, we can recover equity awards made to an employee in cases where the Company has to prepare an accounting restatement due to the material noncompliance by the Company with financial reporting requirements and the restatement is the result of misconduct that resulted from the employee knowingly having engaged in that misconduct, the employee’s gross negligence, or the employee knowingly or through gross negligence having failed to prevent misconduct.
We Utilize an Independent Compensation Consulting Firm
[GRAPHIC MISSING]
The Compensation Committee utilizes Willis Towers Watson, an independent compensation consulting firm, to assist the Committee in determining compensation.
What We Don’t DoHow We Avoid It
We Don’t Permit Hedging
[GRAPHIC MISSING]
We prohibit our directors and employees, including our NEOs, from engaging in short sales, transactions in derivative securities (including put and call options), or other forms of hedging and monetization transactions, such as zero-cost collars, equity swaps, exchange funds and forward sale contracts, that allow the holder to limit or eliminate the risk of a decrease in the value of our securities.
We Don’t Permit Pledging
[GRAPHIC MISSING]
We prohibit our directors and officers, including our NEOs, from holding our securities in margin accounts, pledging our securities as collateral or maintaining an automatic rebalance feature in savings plans, deferred compensation or deferred fee plans, to avoid sales of our securities on behalf of an individual related to margin calls, loan defaults and automatic rebalances, which may occur when the individual has material nonpublic information regarding the Company.

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What We Don’t DoHow We Avoid It
We Don’t Offer Single-TriggerSingle-Trigger “Change of Control” Payments
[GRAPHIC MISSING]
For those NEOs who have employment agreements, the agreements provide that in the case of a “change of control” the NEO only receives severance payments in connection with a termination of their employment.
We Don’t Provide Tax Gross-Up ProvisionsGross-Ups
[GRAPHIC MISSING]
We do not provide for tax gross-up payments for a change of control in employment agreements, or for other benefits.

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COMPETITIVE COMPENSATION AND PEER GROUP REVIEW

Our executive compensation policies are designed to assist us in attracting and retaining qualified executives by providing competitive levels of compensation that are consistent with the executives’ alternatives within the for-profit education industry and the broader market for executive talent. It is the Compensation Committee’s general intent that each NEO’s base salary should be set within a competitive range of the 50th percentile of the survey data received from the Committee’s independent consultant, with appropriate adjustments to reflect the specific situation of each NEO, including how their roles may
50th
The Compensation Committee’s general intent is to set each NEO’s base salary near the50th percentile of the survey data received from the Compensation Committee’s independent consultantconsultant.consultant.

Our executive compensation policies are designed to assist us in attracting and retaining qualified executives by providing competitive levels of compensation that are consistent with the executives’ alternatives within the for-profit education industry and the broader market for executive talent. It is the Compensation Committee’s general intent that each NEO’s base salary should be set near the 50th percentile of the survey data receiveddiffer from the Compensation Committee’s independent consultant.those at other companies. The Compensation Committee believes that the 50th percentile for base salary is appropriate to remain competitive with the companies with which the Company competes for executive talent. Consistent with the approach to base salary, the Compensation Committee believes that target annual incentives should be structured so that target total cash compensation (base salary plus annual incentives) approximates the 50th percentile of the survey data for achievement of target performance goals under the annual incentive plan. Each NEO has the opportunity to receive a stretch payment for superior performance if stretch performance goals are achieved under the plan. Conversely, the opportunitypossibility for below target payment or even no payment at all exists for below target or below threshold performance if performance goals are not achieved. The Compensation Committee believes that these opportunities for base salary and target annual incentive pay are in line with competitive market levels and are appropriate if our NEOs achieve the targeted level of performance.

For 2015,2018, the Compensation Committee continued its prior engagement of Willis Towers Watson as an independent consultant to the Compensation Committee. Willis Towers Watson provided information on competitive levels of compensation that was used by the Compensation Committee in determining 20152018 compensation, including information on base salary, annual incentives, equity awards and total compensation.

As part of the analysis of APEI’s compensation program, Willis Towers Watson provided data from the following published surveys as a primary source: the20142017 Willis Towers Watson CDB General Industry Survey Report; the20142017 Willis Towers Watson Data Services Top Management Survey; and the2013 – 20142016-2017 College and University Professionals Association for Human Resources Administrators in Higher Education Salary Survey. Because of the variance in size among the companies included in the databases for the published surveys, Willis Towers Watson informed the Compensation Committee that, to the extent possible, it had assessed the published survey data in the context of APEI’s projected fiscal year 2015 revenues,2018 revenue, as revenue responsibility is typically one of the most reliable predictors of executive pay.

In addition to published survey data, Willis Towers Watson also examined publicly-filedpublicly filed proxy statements of select industry-specific peers.


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Assessing Competitive Practice

The Compensation Committee identified,also reviewed, with the guidance and input of Willis Towers Watson, a group of companies against which we compare compensation. Thesecompensation, which we refer to as our peer group. The companies in our peer group were originally selected because the Compensation Committee considered them to be similar to and competitive with us in the market for executive talent, and because they are in comparable or related businesses (e.g., focus on secondary education and online access). ThisFor 2018, the group which we refer to as our peer group, remained the same in 2015 asdid not change from what it had been in 2014the prior four years, and 2013 andit consisted of the following companies:

Bridgepoint Education, Inc.;
Capella Education Company;
Grand Canyon Education, Inc.;
Lincoln Educational Services Corporation;
National American University Holdings, Inc.;
Strategic Education, Inc. (formerly known as Strayer Education, Inc.); and
Universal Technical Institute, Inc.

The review of theour peer group only included comparative information for Dr. Boston and Mr. Sunderland as thebecause our peer group information did not identify executives at comparable positions for Dr. Powell,Mr. Beckett and Ms. Gilbert or Messrs. GibbonsPanzarella and Wilkins.in the case of Mr. Dyberg because he was not an executive officer at the time that compensation was set for 2018.

The comparative data provided by Willis Towers Watson which included informationsurvey data for alleach of the NEOs, except for Mr. Gibbons,and was used in connection with our determinations of base salaries, target annual incentive compensation, and equity incentive awards as part of the 20152018 compensation setting process, as described below. For those executives for whom both survey data and peer group data are available, the Compensation Committee uses the survey data for its primary comparisons because we believe, consistent with the advice of Willis Towers Watson, that the survey data is more robust and provides a better comparison for the Company than the peer group data. This is in part because peer group data is more limited and typically cannot be size-adjusted to account for revenue responsibilities. Notwithstanding that the survey data is the primary source of comparative information, we believe theour peer group is still important as a secondary review of the competitive market for executive talent.


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ELEMENTS OF COMPENSATION

The compensation program for our NEOs is comprised of three elements: base salary; annual incentive cash compensation; and long-term equity incentives.

Pay Element
How It Links To Performance
BASE SALARY

•   

Regular, fixed element of compensation.



•   

Reviewed annually.



•   

SetGenerally set near the 50th percentile of the survey
     data received from the Compensation Committee’s
     independent consultant.

•   

Intended to be part of a total compensation package
     that is competitive.



•   

Reflects each NEO’s individual role and      responsibility.

ANNUAL INCENTIVE CASH COMPENSATION

•   

Provides cash incentives for achieving and
     surpassing corporate goals.



•   

Offers the opportunity for NEOs to earn:

  ◦  



○annual payments for achievement of earnings targets, which is the single measure for our CEO;
          targets; and

  ◦  

for executives other than our Chief Executive officer,

○   annual payments for individual management objectives (“MBO”s).

satisfaction of MBOs.

•   

Structured so that target total cash compensation
     (base salary plus annual incentives) generally
     approximates the 50th percentile of the survey data
     for achievement of target performance goals under
     the annual incentive plan.

•   

Provides compensation for annual performance.



•   

Helps to focus executives on corporate financial,
     strategic and operational goals, which are expected
     to lead to increased stockholder value.



•   

This focus is enhanced through an additional
     incentive that pays an additional amount to NEOs for
     superior performance, which is referred to as the
     stretch portion of the annual incentive plan.

LONG-TERM EQUITY INCENTIVES

•   

Annual grants of equity awards comprising
     time-based restricted stock units (“RSUs”) and performance-based restricted stock units.


     PSUs.


•   

All awards vest over three years.




•   

Performance-based restricted stock unitsPSUs tied to 20152018 achievement of free cash flow.




•   

SetGenerally set to be consistent with the 50th
     percentile of the survey data received from the
     Compensation Committee’s independent consultant.



•   

Provides compensation that is tied to longer-term
     performance.

•   

Intended to align the interests of the NEOs with
     those of our stockholders.




•   

Time-based vesting aids in the retention of NEOs.




•   

Free cash flow performance measures align with a
     metric that is relevant to the achievement of our
     long-term strategic goals, including with respect to
     having available capital to pursue strategic initiatives.



•   The Compensation Committee retains the right to
     adjust equity awards downwards.


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20152018 COMPENSATION DECISIONS

In setting base salary, annual incentive cash compensation and long-term equity incentives for 2015, we2018, the Compensation Committee considered the compensation levels for our NEOs in 2014,2017, the respective performances of each of our NEOs in 2014,2018, and what wethe Committee believed was required based on the marketplace for executive talent, including based on the information provided by Willis Towers Watson. WeThe Committee also considered the results of the annual advisory vote on the compensation of named executive officers. In 2014,2017, approximately 97%98% of the stockholder votes cast on this proposal were voted in favor of our executive compensation proposal, which was the most recent shareholderstockholder vote before we set our 20152018 compensation. The Compensation Committee considered this in the context of the recommendation of various proxy advisory firms and as part of its decision to continue to increase the proportion of compensation that is performance-based. In 2015,2018, approximately 96%97% of the stockholder votes cast on this proposal were voted in favor of our executive compensation proposal. Given the extremely high level of support reflected in these votes, the Committee concluded that the results of these votes did not indicate a reason to make changes to its compensation setting decisions.

Base Salary

Base salary is an integral part of compensation for our NEOs and is generally set in January of each year, absent other factors, such as promotions.promotions or new hires. For 2015,2018, the Compensation Committee approved increasingincreased Dr. Boston’s base salary by approximately 6.6%. This base2%, resulting in a salary placed Dr. Boston at approximatelythat was slightly above the 50th50th percentile of the survey data and slightly below the 50th50th percentile of theour peer group proxy data. The Compensation Committee determinedconcluded that itan increase was appropriate, to increaseincluding after taking into account Dr. Boston’s relatively long tenure as our CEO, survey and peer group data, the additional role Dr. Boston had undertaken as President of APUS after the departure of former APUS President Karan Powell in October 2017, and the work Dr. Boston performed in connection with that leadership transition.

For the remainder of the continuing NEOs, Mr. Sunderland and Mr. Beckett each received a 2% salary increase, and there was no change in Ms. Panzarella’s base salary. The increases for Mr. Sunderland and Mr. Beckett reflected the percentage increase generally used at the Company in 2018 for senior leaders who were performing well but did not have a significant change in job responsibilities or other factors that would lead to reflect his continued commitmenta more sizable increase. The Committee also considered, in particular, that Mr. Sunderland was already compensated relatively well relative to the Company, the Compensation Committee’s assessment of the continued strong performance of Dr. Boston in a difficult industry environment, and the competitive reviewdata provided by Willis Towers Watson.

The Mr. Sunderland’s base salaries forsalary placed him slightly above the remainder of the NEOs increased by approximately 16.7%, 5.4%, 4.7%, 2.0% and 2.1% for Mr. Sunderland, Dr. Powell, Ms. Gilbert, Mr. Gibbons and Mr. Wilkins, respectively. This increase placed Mr. Sunderland, who became an executive officer on January 1, 2014, closer to the 50th75th percentile of the survey data but still further from that benchmark thanand above the other executive officers. Mr. Sunderland also continued to be significantly lower than the 50th75th percentile of theour peer group data. While the Compensation Committee expects

Mr. Dyberg was appointed to continue increasing Mr. Sunderland’shis position in May 2018 and his base salary overwas set at that time subjecttaking into account the negotiated amount necessary to his continuing strong performance,attract Mr. Dyberg to the Committee believes this was a significantCompany, and appropriatehe did not receive an increase in the second year in which he was an executive officer. The remainder of the increases brought the NEOs within competitive range of the 50th percentile of the survey data, with the exception of Mr. Gibbons. Mr. Gibbons is the only executive officer who is not an executive vice president (or higher) and the Company does not obtain data from Willis Towers Watson for his position. The Compensation Committee felt that the performance of each of the NEOs and the Company had been strong in the prior year and that base salary increases were warranted. in 2018.

Dr. Boston recommended the amounts of the increases for all of the NEOs other than himself, and the Committee concurred, determining that the levels Dr. Boston recommended were appropriate.

Annual Incentive Cash Compensation

We believe annual incentive pay furthers our compensation philosophy and objectives by focusing our NEOs on corporate strategic, financial, strategic and operational goals. The opportunity for annual incentive pay for our NEOs is expressed as a percentage of base salary as follows:

Position
Position
Target Annual Incentive
(as % of Base Salary)
President & CEO
90
60%
%
All Other NEOs
50
50%
%

These percentages for Dr. Boston, Mr. Sunderland, Dr. Powell, Ms. Gilbert and Mr. Wilkins reflectedDyberg reflect the minimum percentages set forth in their employment agreements. After considering the survey data information and the individual performance of the executives, the Compensation Committee believed, in its subjective, but informed,

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judgment, that thesethe percentages for all continuing NEOs should remain the same for 2015, including, with respect to2018. For similar reasons, the Committee concluded that the percentages for Mr. Gibbons.Dyberg were appropriate. Dr. Boston’s annual incentive target is set


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at a higher percentage than those of the other NEOs, which is consistent with overall market practice and is in part a result of the negotiation ofreflects his employment agreement in 2004, at which time we agreed to provide him a larger annual incentive to reflect his greater abilityrole as Chief Executive Officer to influence our business success as well as his greater responsibilities as the head of our Company.President and CEO.

Overall, we believethe Compensation Committee believes that the proportion of target annual incentive pay to target total cash compensation (base salary plus target annual incentive pay) for our NEOs should be a relatively high percentage. It is the Compensation Committee’s general intent, as discussed above, that each NEO’s base salary should be set near the 50th50th percentile of the survey data received from the Compensation Committee’s independent consultant, and that target annual incentives should be structured so that target total cash compensation approximates the 50th50th percentile of the survey data for achievement of target performance goals under the annual incentive plan. We believe that positioning at the 50th50th percentile is appropriate for target total cash compensation because of the high level of performance that we believe is required from our executives in order for the Company to achieve our performance targets. We believe the high percentage of compensation tied to incentive pay increases the focus of our NEOs on achieving our performance goals.

We further enhance this focus through a stretch incentive that pays an additional amount to our NEOs for superior performance, which we refer to as the stretch portion of the annual incentive plan. This additional amount, if achieved, provided an opportunity to Dr. Boston of an additional 40%45% of his base salary (for 100%135% of base salary in total maximum incentive potential), an opportunity to Mr. Sunderland and Mr. WilkinsDyberg of an additional 30% of each of their respective base salaries (for 80% of base salary in total maximum incentive potential), and an opportunity to Dr. Powell,Mr. Beckett and Ms. Gilbert and Mr. GibbonsPanzarella of an additional 20% of each of their respective base salaries (for 70% of base salary in total maximum incentive potential). This stretch incentive would have resulted in maximum total cash compensation payments to our NEOs of amounts in line with the 75th percentile of the survey data for each of our NEOs for whom data was collected, which the Compensation Committee believes is appropriate for exceptional performance.

The Compensation Committee intended that performance under the NEO’sNEOs’ annual incentive awards at both the target and stretch incentive levels would be based on achieving and surpassing financial performance goals and, for our NEOs other than our Chief Executive Officer, achievement of MBOs. However, the achievement of the MBOs was first subject to achievement of a threshold level of financial performance. Our Chief Executive Officer’s annual incentive award opportunity was based solely on a financial performance goal because we thought it was important to focus on the overall financial performanceand achievement of the Company. For our other NEOs, weMBOs. We believe that a split among goals is important to reflect our belief that theyour NEOs should be focused on both an earnings goal and also on specific goals that are relevant to their specific positions and personal goalsresponsibilities and that are largely derived from important strategic and operating plan goals. We believe this split encourages a focus on multiple metrics of performance rather than focusing on one particular metric of performance to the exclusion of others that are also important to our results. However, given the importance of our financial goals in 2015, we established a threshold level of financial performance that had to be achieved before any amounts could be paid out for personal MBO goals. The threshold level of financial performance required before amounts could be earned for achievements of MBOs was fully-diluted earnings per share of $2.13 for the full year 2015. As noted below, the threshold level of financial performance for 2015 was not met, and as a result, the annual cash incentive did not pay out to any of the NEOs.


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The following charts shows the breakdown between the financial goalsgoal and the MBO goals for each NEO, including how they relate to the target and stretch portions of each NEOs potential awards.

The charts also show the amount of payout for 2018 of each portion of the annual incentive plan. The discussion that follows the charts focuses on the financial goal and the MBO goals.

Portion of Annual
Incentive Plan		Weighting of
Performance Goals
Dr. BostonTarget award
equivalent to
60% of base
salary
100% based on financial
performance goals
Stretch award
equivalent to
40% of salary
100% based on financial
performance goals

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Portion of Annual
Incentive Plan
Weighting of
Performance Goals
Opportunity
Actual Payout
Dr. Boston
Target award
equivalent to
90% of base
salary
70% based on
financial
performance goal
$474,950
$ 474,950
 
 
 
20% based on
annual
MBO goals
$135,700
$ 118,738
 
 
 
 
Stretch award
equivalent to
45% of
salary
35% based on
financial
performance goal
$237,475
$ 178,106
 
 
 
10% based on
annual
MBO goals
$67,850
$ 16,963
 
 

Total
Opportunity:
$915,975
Total:
$ 788,756
 
Portion of Annual
Incentive Plan
Weighting of
Performance Goals
Opportunity
Actual Payout
Mr. Sunderland
Target award
equivalent to
50% of base
salary
40% based on
financial
performance goal
$164,424
$164,424
 
 
 
10% based on
annual
MBO goals
$41,106
$41,106
 
 
 
 
Stretch award
equivalent to
30% of
salary
20% based on
financial
performance goal
$82,212
$61,659
 
 
 
10% based on
annual
MBO goals
$41,106
$ 12,332
 
 
Total
Opportunity:
$328,848
Total:
$279,521

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Portion of Annual
Incentive Plan		Portion of Annual
Incentive Plan
Messrs. Sunderland and WilkinsTarget award
equivalent to
50% of base
salary		40% based on financial
performance goals
10% based on annual
MBO goals
Stretch award
equivalent to
30% of salary		20% based on financial
performance goals
10% based on annual
MBO goals
 
Portion of Annual
Incentive Plan
Weighting of
Performance Goals
Opportunity
Actual Payout
Mr. Dyberg
Target award
equivalent to
50% of base
salary
40% based on
financial
performance goal
$93,973
$93,973
 
 
 
10% based on
annual
MBO goals
$23,493
$23,493
 
 
 
 
Stretch award
equivalent to
30% of
salary
20% based on
financial
performance goal
$46,986
$35,240
 
 
 
10% based on
annual
MBO goals
$23,493
$17,620
 
 
 
Total
Opportunity:
$187,945


Total:
$170,325
 
Portion of Annual
Incentive Plan
Weighting of
Performance Goals
Opportunity
Actual Payout
Mr. Beckett
Target award
equivalent to
50% of base
salary
40% based on
financial
performance goal
$112,200
$ 112,200
 
 
 
10% based on
annual
MBO goals
$28,050
$ 28,050
 
 
 
 
Stretch award
equivalent to
20% of
salary
15% based on
financial
performance goal
$42,075
$ 31,556
 
 
 
5% based on
annual
MBO goals
$14,025
$ 9,818
 
 
 
Total
Opportunity:
$196,350


Total:
$181,624

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Portion of Annual
Incentive Plan		Portion of Annual
Incentive Plan
Dr. Powell, Ms. Gilbert
and Mr. Gibbons		Target award
equivalent to
50% of base
salary		40% based on financial
performance goals
10% based on annual
MBO goals
Stretch award
equivalent to
20% of salary		15% based on financial
performance goals
5% based on annual
MBO goals
 
Portion of Annual
Incentive Plan
Weighting of
Performance Goals
Opportunity
Actual Payout
Ms. Panzarella
Target award
equivalent to
50% of base
salary
40% based on
financial
performance goal
$80,000
$ 80,000
 
 
 
10% based on
annual
MBO goals
$20,000
$19,000
 
 
 
 
Stretch award
equivalent to
20% of
salary
15% based on
financial
performance goal
$30,000
$ 22,500
 
 
 
5% based on
annual
MBO goals
$10,000
$6,500
 
 
 
Total
Opportunity:
$140,000


Total:
$128,000

Financial Performance GoalsGoal. In 2015,For 2018, the Compensation Committee determinedcontinued its practice of providing that the portion of each NEOs annual incentive plan award that relates to financial performance would be based on achieving and surpassing a specified amount of earnings per share after taking into account any payment under the annual incentive plan.

Financial Performance
Metric
Performance Goals
Threshold
Target
Stretch (Maximum)
Earnings per Diluted Share
$
1.30
 
$
1.44
 
$
1.58
 
   
Financial Performance
Metric		 Performance Goals
 Threshold Target Stretch (Maximum)
Earning per Diluted Share $2.13  $2.37  $2.61 

The Compensation Committee specified target earnings per share of $2.37,$1.44, which reflected the earnings per share in the Company’s budget when approved by the Board of Directors. For 2015,2018, the Compensation Committee also specified that 50% of the target amount would be paid if an earnings per share threshold of $2.13$1.30 was attained, which would reflect 90% achievement of the Compensationtarget level, which the Committee thought was a level of achievement that would still require effort for the companyCompany to achieve. The Compensation Committee determined that it was appropriate to provide an incentive at a threshold level because it


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would provide an annual incentive that reflected the positive performance of the Company and the contributions of the Company’s employees and NEOs. The Compensation Committee provided that the stretch portion of the annual incentive plan related to financial performance would be payable on earnings per share of $2.61, after taking into account$1.58, which would reflect 110% achievement of the payment of all annual incentive amounts.target level. This level of achievement was viewed as representing exceptional performance for which management should be rewarded.

For 2018, the Compensation Committee determined that, for purposes of our annual incentive plan, earnings would be treated as $1.53 per share, which reflected 106.3% achievement of the target level of financial performance, resulting in a payout of the target amount and 75% of the stretch opportunity related to financial performance. For 2018, we reported earnings per share, on a GAAP basis, of $1.54 per share.

MBO Goals. MBOs are based on company-wide performance goals consistent with our strategic plan for which executiveexecutives are directly responsible, or to whose success they contribute, and provide personal accountability in addition to rewards for Company performance. However, many MBO targets are shared between executives to reflect that executives have tomust work together to achieve results. By focusing on goals consistent with our strategic plan, the MBOs are intended to focus the executives on goals that will deliver long-term stockholder value. We believe that the MBOs help to keep management from focusing solely on the current year’s financial results, which are covered by other parts of the annual incentive plan, because many of the MBOs represent our view of key actions required to capture future market opportunities and help prepare the Company for continued growth and improvement in the future.

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In establishing our MBOs for 2015,2018, we set goals that were consistent with our strategic, plan,financial and operational plans, and were set with the opportunity to pay out minimum, target, and stretch amounts. Achievement at the minimum level represents strong performance and would result in payout of 50% of the target amount, achievement at the target level represents superior performance and would result in payout of the target amount, and achievement at the stretch level represents a level of excellent performance and would result in payout of the target and stretch amounts. When setting the stretch MBO goals, the Compensation Committee did not believe that it was likely that an executive would achieve all of his or her MBOs at the stretch level.

$0Amount of annual incentive payouts for 2015.

Because Furthermore, for 2018, the threshold levelCompensation Committee provided that no payments would be made for MBO performance unless half of financial performancethe target was not achieved for eitheron the financial performance goals or the MBO goals, no amounts were earned underportion of the annual incentive plan, and no payments would be achieved for MBO performance above target unless the target was achieved on the financial portion of the annual incentive plan.

The 2018 MBOs for Dr. Boston, consistent with his role as our Chief Executive Officer, are set forth below.

Managing to Budget: Achieve financial performance reflecting revenue and profit margins consistent with the 2018 budget and update and build the 2019 budgets of APEI and APUS to reflect the adoption of the shared services model. The Committee concluded that Dr. Boston achieved this objective at the target level, including based on our financial results and the Board’s approval of our 2019 budget.
Achieve Academic Excellence: Obtain a positive result from HLC on HLC’s reaccreditation review and achieve certain enrollment milestones for APUS and HCN. The Committee concluded that Dr. Boston achieved this objective at the target level, including based on the HLC’s approval of APUS’s accreditation and the achievement of enrollment metrics.
Position APEI for the year. AsFuture: Implement the strategic plan with additional revenue goals, achieve growth through an acquisition, implement a result,technology platform in the Compensationemergency and disaster discipline, implement the shared services model, and draft and gain Board of Trustee approval for APUS long-term direction strategy. The Committee concluded that Dr. Boston achieved this objective at the minimum level, reflecting positive results on most of the measures, but reflecting that the Company did not make final determinationsclose an acquisition during 2018.
Drive Organizational and Operational Excellence: Draft and implement a technology plan, hire and promote talent, provide leadership to the Board of Trustees in search for a President of APUS, implement key operational pacing items, and foster a culture and practice of innovation, quality and respect. The Committee concluded that Dr. Boston achieved this objective at the stretch level, reflecting Dr. Boston’s strong leadership on these elements, while also recognizing the importance of continuing to identify talented leaders both internally and externally.

The 2018 MBOs for Mr. Sunderland, consistent with his role as our Chief Financial Officer, are set forth below.

Manage to Budget (30% weighting): Achieve financial performance reflecting revenue, operating income, and free cash flow consistent with the 2018 budget. The Committee concluded that Mr. Sunderland achieved this objective at the target level, particularly reflecting the Company’s achievement of operating income and free cash flow targets.
Position APEI for the Future (20% weighting): Implement the strategic plan with additional revenue goals, achieve growth through an acquisition, and draft and gain Board of Trustee approval for APUS long-term strategy. The Committee concluded that Mr. Sunderland achieved this objective at the target level, reflecting positive results on most of the measures, but reflecting that the Company did not close an acquisition during 2018.
Organizational Realignment (20% weighting): Implement a new purchasing system, build the 2019 budgets for APEI and APUS to reflect the adoption of the shared services model, and fully implement the shared services model. The Committee concluded that Mr. Sunderland achieved this objective at the target level, particularly reflecting the achievement with respect to the adoption and implementation of the shared services model.

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New Auditor Selection (20% weighting): Create plan for selection of an independent auditor and if a new auditor is selected, onboard the new audit firm for a review of second quarter earnings. The Committee concluded that Mr. Sunderland achieved this objective at the stretch level, reflecting the successful process for the Audit Committee’s selection of a new independent auditor.
Company Values (10% weighting): Foster a culture and practice of innovation, quality and respect, and take concrete actions, and maintain the Code of Conduct and highest ethical standards. The Committee concluded that Mr. Sunderland achieved this objective at the stretch level, reflecting his leadership and demonstration of our values.

The 2018 MBOs for Mr. Dyberg, consistent with his role as our Chief Technology Officer, are set forth below:

Manage to Budget (25% weighting): Achieve financial performance reflecting revenue, operating income, and free cash flow consistent with the 2018 budget. The Committee concluded that Mr. Dyberg achieved this objective at the target level, particularly reflecting the Company’s achievement of operating income and free cash flow targets.
Position APEI for the Future (25% weighting): Define future state architecture for information technology (“IT”) investments and establish a related enterprise architecture function in IT, define an IT strategic plan and align the strategic plan financially, deliver on certain cybersecurity objectives, and establish a continuously evolving information security program that is not dependent on people. The Committee concluded that Mr. Dyberg achieved this objective at the stretch level, reflecting significant achievement of each of the elements.
Organizational Realignment (25% weighting): Implement a new IT organizational model, institute new demand management and portfolio management processes, establish a customer relationship management function in IT, and establish project management and process and business analysis functions in IT. The Committee concluded that Mr. Dyberg achieved this objective at the stretch level, reflecting significant achievement of each of the elements.
Company Values (25% weighting): Foster a culture and practice of innovation, quality and respect, and take concrete actions, and maintain the Code of Conduct and highest ethical standards. The Committee concluded that Mr. Dyberg achieved this objective at the stretch level, reflecting his leadership and demonstration of our values.

The 2018 MBOs for Mr. Beckett, consistent with his role as our General Counsel, are set forth below.

Manage to Budget (30% weighting): Support efforts to achieve financial performance reflecting revenue, operating income, and free cash flow consistent with the 2018 budget. The Committee concluded that Mr. Beckett achieved this objective at the target level, particularly reflecting the Company’s achievement of operating income and free cash flow targets.
Organizational Realignment (30% weighting): Support organizational realignment and implementation of the shared services model. The Committee concluded that Mr. Beckett achieved this objective at the stretch level, reflecting significant achievement of each of the elements and our successful organizational realignment.
Enterprise Risk Assessment and Cybersecurity Objectives (30% weighting): Implement new and modified risks for the enterprise risk assessment, participate in the Information Security Steering Committee, update incident response plan and participate in testing of the plan, support development of an implementation plan for the EU General Data Protection Regulation, and attend a cybersecurity professional development event or seminar. The Committee concluded that Mr. Beckett achieved this objective at the stretch level, reflecting significant achievement of each of the elements.
Company Values (10% weighting): Foster a culture and practice of innovation, quality and respect, and take concrete actions, and maintain the Code of Conduct and highest ethical standards. The Committee concluded that Mr. Beckett achieved this objective at the stretch level, reflecting his leadership and demonstration of our values.

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The 2018 MBOs for Ms. Panzarella, consistent with her role as our Senior Vice President, Human Resources and Community Affairs, are set forth below.

Manage to Budget (30% weighting): Achieve financial performance reflecting revenue, profit margins, and free cash flow consistent with the 2018 budget and manage staffing levels in relation to the same. The Committee concluded that Ms. Panzarella achieved this objective at the target level, particularly reflecting the achievement of operating income and free cash flow targets.
Organizational Realignment (25% weighting): Execute human resource deliverables related to organizational realignment and implementation of the shared services model. The Committee concluded that Ms. Panzarella achieved this objective at the stretch level, reflecting significant achievement of each of the elements and our successful organizational realignment.
Succession Planning (25% weighting): Further develop and execute succession plan in collaboration with senior management and reorganize the talent pool based on the strategic plan and organizational realignment. The Committee concluded that Ms. Panzarella achieved this objective at the stretch level, reflecting significant achievement of each of the elements.
Community Outreach (10% weighting): Assess and organize the APEI/APUS community giving program, determine feasibility of a corporate volunteer program and launch program if appropriate. The Committee concluded that Ms. Panzarella achieved this objective at the minimum level, particularly reflecting the organization of the community giving program.
Company Values (10% weighting): Foster a culture and practice of innovation, quality and respect, and take concrete actions, and maintain the Code of Conduct and highest ethical standards. The Committee concluded that Ms. Panzarella achieved this objective at the stretch level, reflecting her leadership and demonstration of our values.

After discussions with Dr. Boston, the Committee met in executive session and concluded that Dr. Boston’s MBOs in total were met at the 87.5% of target and 25% of stretch levels. In reviewing the MBOs for the other executive officers, the Compensation Committee reviewed the levels of achievement with Dr. Boston and determined that Mr. Sunderland’s MBOs in total were met at 100% of target and 30% of stretch levels, Mr. Dyberg’s MBOs in total were met at 100% of target and 75% of stretch levels, Mr. Beckett’s MBOs in total were met at 100% of target and 70% of stretch levels, and Ms. Panzarella’s MBOs were met at 95% of target and 65% of stretch levels. Unlike for the other executive officers, the Committee did not rely on specific MBOs.weightings of Dr. Boston’s MBOs for 2018 because the Committee wanted the ability to make downward adjustments, if appropriate, to reflect overall performance. The payouts approved by the Committee for the MBOs of the NEOs are set forth in the tables above.

Equity Incentives

We believe that a significant portion of our NEOs’ total compensation should be in the form of equity awards in order to align the priorities of the NEOs with the interests of our stockholders. In 2015,2018, to further emphasize performance and ensure management’s objectives are aligned with those of our stockholders, the equity awards were split 50% as RSUs and 50% as PSUs, a shift from 60% as time-based restricted stockRSUs and 40% as performance-based restricted stock units. This reflects an increase from 35% of the portion of the awardPSUs in 2014 that was allocated as performance-based restricted stock units and reflects the Compensation Committee’s desire to focus more on performance-based awards and to incentivize executives to focus on the Company’s financial performance.2017.

The Committee also continued to use free cash flow as the performance measure for the performance-based restricted stock unitPSU awards in 2015, and will again use this measure in 2016.2018. Free cash flow was originally selected in 2013 after:

consulting with Willis Towers Watson;
reviewing measures that are used by others in the Company’s industry;
evaluating metrics that are important to investors; and
reflecting upon a desire to avoid using an earnings measure similar to what was used for the financial portion of the annual incentive plan.

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Prior to using free cash flow for 2018, the Compensation Committee reevaluated each of these points and confirmed that it remained appropriate to use free cash flow as the metric for these awards. Free cash flow, which is a non-GAAP measure, is defined as income from operations before income taxesplus interest expense less interest income (interest)lessplus depreciation and amortization lesscapital expendituresless capitalized program development costs and other assets.costs. The 2015 awards2018 free cash flow goals were structuredset as follows:

 
Threshold
Target
Stretch (Maximum)
Free Cash Flow Goal
$28,886,400
$36,108,000
$43,329,600
Percentage of Award Earned
50% (of target)
100% (of target)
200% (of target)
ThresholdTargetStretch (Maximum)
Free Cash Flow Goal$46.6 million$51.8 million$56.9 million
Percentage of Award Earned50% (of target)100% (of target)200% (of target)

The threshold level was established at 80% of the target level and the stretch level was set at 120% of the target level in 2018. These numbers reflected the Compensation Committee’s view of appropriate performance. For a level of free cash flow between thesethe applicable dollar amounts set forth above, the percentage of the award earned would be prorated accordingly. For 2015,2018, free cash flow was $49.1 million after an adjustment of $3.7 million of expenses related$40,518,000. However, the Committee adjusted this downward by $1,000,000 to workforce realignment costs and the write-down of information technology and other assets$39,518,000, including to take into account amounts budgeted for capital expenditures in 2018 that were reported. These expenses were also included in our earnings release for the year ended December 31, 2015 in the presentation of non-GAAP net income. The resultdeferred into 2019 or otherwise not expended. This adjusted amount was achievement109.4% of the free cash flow target at 94.9% of the budgeted amount, which exceeded the threshold goal and resulted in 74.3%147% of the target awards being earned. The award earned is further subject to time-based vesting, in order to continue to provide a retention element and to encourage executives to focus on the long-term performance of the Company.

In determining the appropriate level of 20152018 equity incentive grants for our NEOs, the Compensation Committee reviewed comparative survey information provided by Willis Towers Watson. The Compensation Committee considered the survey data and determined that awards that were consistent with the 50th50th percentile of the survey data for its executive vice presidents and higher would be appropriate to recognize performance and remain competitive with comparable companies. In addition, each senior vice president received an award that was intended to be consistent with market practice using a percentage of salary and based on his or her own salary. In setting the percentages, the compensation committee continued to consider equitable treatment among executives, but recognized that the market for competitive talent varies among executives; just as base salary varies, it is appropriate for equity awards to vary, as well.

The award sizes for the equity incentive awards were discussed at the same time the Compensation Committee met to set the other elements of compensation so that all elements of compensation were set taking into account the total compensation package. After determining the dollar value of equity incentive awards, the Committee calculated the number of shares to be subject to the awards using a 60-day rolling average for the Company’s stock price as of a date shortly before the Committee met to approve the grants. The Compensation Committee believes that doing so removed some of the variability that can impact awards if it were to use the stock price on only one date.

Consistent with historical practice, the restricted stock awardsRSUs and the performance-based restricted stock unitsPSUs vest in three equal installments on the first three anniversaries of the grant date, subject to achievement of performance metrics for the performance-based restricted stock units.PSUs.

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OTHER COMPENSATION POLICIES AND PRACTICES

Employment Agreements and Post-Termination Compensation

We have entered into employment agreements with each of our NEOs except forDr. Boston, Mr. Gibbons.Sunderland, and Mr. Dyberg. These agreements provide the executive with severance payments upon certain terminations, including termination without cause, termination by the executive for good reason, in the event of a change of control, or if the executive’s employment agreement is not assumed by a successor entity in a change of control. The agreements provide for certain payments in connection with a termination of the executives’ employment within six months180 days of a change of control of the Company. We believe that these agreements were necessary to attract some of our NEOs and help to retain ourthese NEOs due to the prevalence of similar arrangements in the market in which we compete for executives.

In 2007, prior to the time that we were a public company, we entered into an amendment and restatement of our employment agreementsagreement with Dr. Boston and Mr. Wilkins to provide for additional severance payments for termination without cause or by the executivesDr. Boston for good reason in connection with a change of control and to provide that if severance payments payable by us become subject to the excise tax on “excess parachute payments,” we would reimburse themDr. Boston for the amount of such excise tax (and the income and excise taxes on such reimbursement). We agreed to provide Dr. Bostonentered into the amended and Mr. Wilkins with these changesrestated agreement in anticipation of our initial public offering to reflectprovide Dr. Boston with what at the time we concluded were prevalent practices in the marketplace in which we compete for executives, and because as a public company we wanted these officershim to be able to focus on our operations and not be distracted by theirhis personal situationssituation in the event a change of control transaction arose, and in the case of Dr. Boston, to reflect his long-term commitment to us and our long-term commitment to him as our Chief Executive Officer. We further amended the employment agreements foragreement with Dr. Boston and Mr. Wilkins in December 2008 to provide for technical compliance with certain Department of the Treasury regulations. We entered into the employment agreement with Dr. Powell in 2011 in connection with her appointment as our Provost.


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In 2013, the Compensation Committee requested and received an assessment from Willis Towers Watson on the terms contained in theDr. Boston’s employment agreements and comparisonsagreement in comparison to market practice and theour peer group. The Compensation Committee then negotiated amendmentsan amendment to theDr. Boston’s employment agreementsagreement in 2014, including eliminating any reimbursement for excise taxes from the employment agreements, andagreement. In 2014, the Committee also authorized negotiating an employment agreementsagreement with Mr. Sunderland and Ms. Gilbert on substantially the same terms as the agreements with our other NEOs. The Committee determined it was appropriate to have an employment agreementsagreement with each of Mr. Sunderland and Ms. Gilbert in an effort to retain Mr. Sunderland, treat themhim similarly to other executives, to retain them and to obtain theirensure his agreement towould be subject to post-employment non-competition and non-solicitation terms with which theyhe otherwise would not have had to comply. The amendments to Dr. Boston’s employment agreement was further amended in July 2016. to increase Dr. Boston’s annual incentive opportunity. In 2018, the Committee determined in hiring Mr. Dyberg that it was appropriate and necessary to enter into the employment agreement with Mr. Wilkins’ employment agreements were enteredDyberg. In reaching this conclusion, the Committee took into in April 2014. The amendmentaccount that as an Executive Vice President Mr. Dyberg was similarly situated to Dr. Powell’s employmentMr. Sunderland, that the Company would gain benefits from the agreement, and the newnegotiations to attract Mr. Dyberg to the Company.

In 2017, at the recommendation of the Compensation Committee, the Board of Directors of the Company, adopted the American Public Education, Inc. Executive Severance Plan (the “Executive Severance Plan”). The Committee recommended the adoption of the Executive Severance Plan in order to provide severance benefits to Senior Vice Presidents of the Company that are designated by the Committee without having to adopt individual employment agreementsor severance agreements. The Committee concluded that a severance arrangement for the designated participants was appropriate in order to help retain these executives. In concluding it was appropriate to adopt the Executive Severance Plan, the Committee considered practices in industry generally and among the Company’s peer group, as well as the advice of Willis Towers Watson. The Committee also considered that the Executive Severance Plan requires as a condition to receiving benefits that each participant must comply with Mr. Sunderland and Ms. Gilbert were entered into in August 2014.

On December 18, 2015, Mr. Wilkins retired from his position atcovenants not to compete with the Company and agreedits affiliates and not to consult withsolicit employees of the Company or its affiliates, in each case during the term of employment and for a period of 1812 months particularlythereafter. In addition, in order to work on the transitionreceiving severance benefits, a participant must agree to the next chief executive officer of Hondros College of Nursing. In connection with Mr. Wilkins’s retirement, he andrelease all claims against the Company entered into a letter agreement dated November 6, 2015 to formalize the terms of his departure. As a result, Mr. Wilkins’s departure from the Company was treated as a termination of employment by Mr. Wilkins for good reason and he was entitled to the benefits provided for in his employment agreement in that circumstance. The agreement further provided that, as compensation for the consulting services to be provided by Mr. Wilkins, Mr. Wilkins will continue to vest in his outstanding equity awards for an 18-month period after his retirement.its affiliates and their respective officers and directors.

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For additional information regarding these agreements, including a quantification of benefits that would be received by these officers had termination occurred on December 31, 2015,2018, see the section titled “Potential Payments upon Termination or Change in Control” below.

Non-Qualified Deferred Compensation

In 2013, we adoptedThe Company maintains a non-qualified deferred compensation plan in which our executive officers are permitted to participate. In determining to adopt the plan, we took into account that theThe Internal Revenue Code limits the amount of matching contributions that we can contribute to our traditional 401(k) plan for the benefit of our executives. The deferred compensation plan provides that we will make an annual matching contribution to plan participants in an amount equal to the difference between the matching contribution that the participant would have received under our 401(k) plan if those limitations under the Internal Revenue Code did not apply and the matching contribution that the employee actually received under our 401(k) plan. The balances in the plan are only available for investment in investment options that are also available under our 401(k) plan. We believe that it is fair to provide this plan to our executives because absent the limitations under the Internal Revenue Code, they would have otherwise received these amounts. The plan also permits us, but does not require us to, make additional, discretionary contributions. We did not make any discretionary contributions in 2015.2018.

Effect

Limited Perquisites and No Tax Gross-Ups

As an online academic institution, APUS has deans, program directors, faculty members and others who live at great distance from our headquarters in Charles Town, West Virginia. As a result and because Charles Town has relatively limited options compared to what would be available if our headquarters were in a larger city, APUS has housing available for the use of Accounting and Tax Treatment on Compensation Decisions

Section 162(m) of the Internal Revenue Code of 1986, as amended, generally imposes a $1 million limit on the amount that a public company may deduct for compensation paid to a company’s CEO or any of the company’s three other most highly compensated executive officers (other than the CFO) whovisitors when they are employed as of the end of the year. This limitation does not apply to compensation that meets the requirements under Section 162(m) for “qualifying performance-based” compensation (i.e., compensation paid only if the individual’s performance meets pre-established objective goals based on performance criteria approved by stockholders) that is established by a Compensation Committee that consists only of  “outside directors” as defined for purposes of Section 162(m). Allvisiting Charles Town. We allow members of our Compensation Committee qualify as “outside directors”. We currently expectleadership team the opportunity to consider the qualificationalso utilize university housing when they are staying overnight in Charles Town, even if that is their principal place of our annual incentive plan compensation as performance-based compensation within the meaningbusiness. In 2018, Dr. Boston took advantage of the Internal Revenue Code, buthousing benefit. In order that is only one factor among many considered byDr. Boston can be more efficient and be able to work on his commute to Charles Town, we also provide Dr. Boston with the Committee.opportunity to utilize a car service for travel to and from Charles Town, in addition to other locations. In addition, in 2018, in connection with Mr. Dyberg’s hiring and pursuant to his employment agreement, we paid for or otherwise reimbursed certain of Mr. Dyberg’s relocation expenses, including expenses related to temporary housing, travel, and moving expenses, as well as closing costs for a new home. We did not provide a gross-up to our NEOs for any personal income taxes they incurred as a result of these benefits.


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Role of Executives in Executive Compensation Decisions

Historically, our Chief Executive Officer has recommended to the Compensation Committee each element of compensation for all executive officers other than himself, and the Compensation Committee determines the target level of compensation for each executive officer.

The amount of each element of compensation for our Chief Executive Officer is determined by the Compensation Committee. Our Chief Executive Officer does not participate in deliberations relating to his own compensation. None of our other executive officers participates in any deliberations related to the setting of executive compensation.

CEO Pay Ratio

As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are presenting the ratio of our Chief Executive Officer’s annual total compensation to our median employee’s annual total compensation.

In order to identify our median employee for purposes of calculating the ratio, we used the taxable wages for our approximately 2,800 employees other than our Chief Executive Officer as of December 31, 2018.

As set forth in the Summary Compensation Table appearing elsewhere in this Proxy Statement, the 2018 annual total compensation as determined under Item 402 of Regulation S-K for our Chief Executive Officer was $3,255,285. The 2018 annual total compensation for our median employee, who is a part-time faculty member at APUS, as determined on the same basis was $26,666. The ratio of our Chief Executive Officer’s annual total compensation to our median employee’s total compensation for 2018 is 122 to 1. This ratio was determined using reasonable estimates as permitted by the SEC’s rules and should not be used as a comparison with the exception of Mr. Gibbons, our Senior Vice President, Chief Administrative Officer, who provides support to the Committee and facilitates the requests for information received from the independent consultant.pay ratios disclosed by other companies.

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COMPENSATION COMMITTEE REPORT

THE FOLLOWING REPORT OF THE COMPENSATION COMMITTEE DOES NOT CONSTITUTE SOLICITING MATERIAL AND SHOULD NOT BE DEEMED FILED OR INCORPORATED BY REFERENCE INTO ANY OTHER FILING BY US UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES EXCHANGE ACT OF 1934, EXCEPT TO THE EXTENT WE SPECIFICALLY INCORPORATE THIS REPORT.

The Compensation Committee reviewed and discussed the above Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with the Company’s management. Based on its review and discussions with the Company’s management, the Compensation Committee recommended that the Compensation Discussion and Analysis be included in the Company’s Proxy Statement and in the Company’s Annual Report on Form 10-K (including by incorporation by reference to thethis Proxy Statement).

Compensation Committee (April 19, 2016)(March 27, 2019)
MG (Ret) Barbara G. Fast, Chairperson
Eric C. Andersen
Westley MooreWilliam G. Robinson, Jr.

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COMPENSATION TABLES AND DISCLOSURES

Summary Compensation Table

Name and Principal Position(1)
Year
Salary(2)
Bonus(3)
Stock
Awards(4)
Non-Equity
Incentive
Plan
Compensation(5)
All Other
Compensation(6)
Total
Wallace E. Boston, Jr.
President and Chief Executive Officer
 
2018
 
$
678,500
 
 
—
 
$
1,732,198
 
$
788,756
 
$
55,831
 
$
3,255,285
 
 
2017
 
$
665,000
 
 
—
 
$
1,139,691
 
$
79,800
 
$
82,184
 
$
1,966,675
 
 
2016
 
$
650,000
 
 
—
 
$
1,131,225
 
$
383,500
 
$
60,621
 
$
2,225,346
 
Richard W. Sunderland, Jr.
Executive Vice President, Chief Financial Officer
 
2018
 
$
411,060
 
 
—
 
$
411,545
 
$
279,521
 
$
20,618
 
$
1,122,744
 
 
2017
 
$
403,000
 
 
—
 
$
230,710
 
$
32,340
 
$
32,010
 
$
698,060
 
 
2016
 
$
393,269
 
 
—
 
$
229,141
 
$
169,000
 
$
19,853
 
$
811,263
 
Patrik Dyberg
Chief Technology Officer
 
2018
 
$
234,932
 
$
50,000
 
$
652,413
 
$
170,325
 
$
56,012
 
$
1,163,682
 
Thomas A. Beckett
Senior Vice President, General Counsel and Secretary
 
2018
 
$
280,500
 
 
—
 
$
154,470
 
$
181,624
 
$
13,612
 
$
630,206
 
 
2017
 
$
275,000
 
 
—
 
$
92,884
 
$
27,500
 
$
11,953
 
$
407,337
 
 
2016
 
$
228,846
 
 
—
 
$
92,213
 
$
125,580
 
$
8,778
 
$
455,527
 
Amy N. Panzarella
Senior Vice President, Human Resources and Community Affairs
 
2018
 
$
200,000
 
 
—
 
$
90,112
 
$
128,000
 
$
9,168
 
$
427,280
 
 
2017
 
$
200,000
 
 
—
 
$
92,884
 
$
17,500
 
$
17,721
 
$
328,105
 
 
2016
 
$
161,007
 
 
—
 
$
42,635
 
$
73,343
 
$
8,319
 
$
285,304
 
      
Name and Principal Position Year Salary Stock
Awards(1)		 Non-Equity
Incentive
Plan
Compensation(2)		 All Other
Compensation(3)		 Total
Wallace E. Boston, Jr.
President and Chief
Executive Officer		  2015  $650,468  $1,159,516   —  $26,019  $1,836,003 
  2014  $610,000  $1,245,167   —  $26,679  $1,881,846 
  2013  $560,000  $1,210,529  $210,000  $23,617  $2,004,146 
Richard W. Sunderland, Jr.
Executive Vice President, Chief Financial Officer		  2015  $350,000  $234,128   —  $14,000  $598,128 
  2014  $300,000  $452,222   —  $13,125  $765,347 
Karan Powell
Executive Vice President,
Provost		  2015  $300,728  $155,450  $—  $12,029  $468,207 
  2014  $280,000  $157,209   —  $12,829  $450,038 
  2013  $250,000  $156,798  $78,125  $16,765  $501,688 
Carol S. Gilbert
Executive Vice President,
Programs and Marketing		  2015  $290,520  $155,450  $—  $11,621  $457,591 
  2014  $277,000  $157,209  $—  $12,435  $446,644 
  2013  $271,193  $156,798  $84,687  $17,722  $530,400 
Peter W. Gibbons
Senior Vice President,
Chief Administrative Officer		  2015  $252,560  $124,360  $—  $10,193  $387,113 
Harry T. Wilkins
Former Executive Vice President, Chief Development Officer		  2015  $385,195  $155,450   —  $9,914  $550,559 
  2014  $335,000  $256,511   —  $16,290  $607,801 
  2013  $325,000  $264,800  $101,563  $16,980  $708,342 

(1)Information is provided for 2018 only for Mr. Dyberg because he was not an NEO in 2017 or 2016.
(2)Values reflect the amounts actually paid to the NEOs for each year. For Mr. Dyberg, the amount reflects his annual base salary of $350,000 pro rated from his May 7, 2018 hire date to December 31, 2018.
(3)Amount shown for Mr. Dyberg reflects a signing bonus paid to him in connection with his hire.
(4)Amounts reflect the aggregate grant date fair value, computed in accordance with FASB ASC Topic 718, of restricted stock awardsRSUs and restricted stock units,PSUs, excluding estimates of forfeiture. A discussion of the relevant assumptions used in calculating these equity awards can be found in Notes 12 and 710 to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2015.2018. For this purpose, performance-based restricted stock unitsPSUs are valued assuming achievement at target, which was the probable outcome determined for accounting purposes at the time of grant. The target and maximum grant date values of performance share awards for 20152018 are as follows:

  
Name Grant Date Value at Target
Performance		 Grant Date Value at
Maximum Performance
Wallace E. Boston, Jr. $517,023  $1,034,046 
Richard W. Sunderland, Jr. $104,396  $208,792 
Karan Powell $69,320  $138,640 
Carol S. Gilbert $69,320  $138,640 
Peter W. Gibbons $55,456  $110,912 
Harry T. Wilkins $69,320  $138,640 
Name
Grant Date Value at
Target Performance
Grant Date Value at
Maximum Performance
Wallace E. Boston, Jr.
$
866,099
 
$
1,732,198
 
Richard W. Sunderland, Jr.
$
205,773
 
$
411,546
 
Patrik Dyberg
$
—
 
$
—
 
Thomas A. Beckett
$
77,235
 
$
154,470
 
Amy N. Panzarella
$
45,056
 
$
90,112
 
(2)(5)Amounts represent annual incentive payments paid pursuant to our annual incentive compensation plan based upon the achievement of performance goals established by our Compensation Committee.

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(3)(6)Amounts include, but are not limited to, 401(k) contribution matches made by us and non-qualified deferred compensation plan continuation matches made by us in respect of 2015,2018, as follows:
Name
401(k) Match
Non-Qualified Deferred
Compensation
Plan Matching
Contribution
Wallace E. Boston, Jr.
$
11,000
 
$
19,311
 
Richard W. Sunderland, Jr.
$
11,000
 
$
6,720
 
Patrik Dyberg
$
7,000
 
$
—
 
Thomas A. Beckett
$
11,000
 
$
1,312
 
Amy N. Panzarella
$
8,748
 
$
—
 

For Dr. Boston, amount for 2018 also includes $18,840 for utilization of a car service as well as payments in connection with housing in Charles Town, WV and club membership dues for a club that Dr. Boston used solely for business meetings in 2018. For Mr. Dyberg, amount for 2018 also includes $47,315 for expenses related to his relocation, including temporary housing, moving, and travel expenses, as well as closing costs for a new home.

  
Name 401(k) Match Non-Qualified Deferred
Compensation Plan Matching Contribution
Wallace E. Boston, Jr. $10,600  $15,419 
Richard W. Sunderland, Jr. $10,600  $3,400 
Karan Powell $10,600  $1,429 
Carol S. Gilbert $10,600  $1,021 
Peter W. Gibbons $10,193  $— 
Harry T. Wilkins $9,914  $— 

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20152018 Grants of Plan-Based Awards

The following table sets forth information with respect to grants of plan-based awards to our NEOs during 2015:2018:

Name
Award Type
Grant Date
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards(1)
Estimated Future Payouts
Under Equity Incentive
Plan Awards(2)
All Other
Stock
Awards:
Number
of Stock
or Units(3)
Grant
Date Fair
Value of
Stock
Awards(4)
Threshold
Target
Maximum
Threshold
Target
Maximum
Wallace E. Boston, Jr.
RSUs
 
1/15/2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
33,832
 
$
866,099
 
PSUs
 
1/15/2018
 
 
 
 
 
 
 
 
 
 
 
16,916
 
 
33,832
 
 
67,664
 
 
 
 
$
866,099
 
Annual Incentive Plan
 
 
 
$
305,325
 
$
610,650
 
$
915,975
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Richard W. Sunderland, Jr.
RSUs
 
1/15/2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8,038
 
$
205,773
 
PSUs
 
1/15/2018
 
 
 
 
 
 
 
 
 
 
 
4,019
 
 
8,038
 
 
16,067
 
 
 
 
$
205,773
 
Annual Incentive Plan
 
 
 
$
123,318
 
$
205,530
 
$
328,848
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Patrik Dyberg
RSUs
 
5/7/2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
16,750
 
$
652,413
 
PSUs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Incentive Plan
 
 
 
$
70,479
 
$
117,466
 
$
187,945
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Thomas A. Beckett
RSUs
 
1/15/2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3,017
 
$
77,235
 
PSUs
 
1/15/2018
 
 
 
 
 
 
 
 
 
 
 
1,509
 
 
3,017
 
 
6,034
 
 
 
 
$
77,235
 
Annual Incentive Plan
 
 
 
$
56,100
 
$
140,250
 
$
196,350
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amy N. Panzarella
RSUs
 
1/15/2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,760
 
$
45,056
 
PSUs
 
1/15/2018
 
 
 
 
 
 
 
 
 
 
 
880
 
 
1,760
 
 
3,520
 
 
 
 
$
45,056
 
Annual Incentive Plan
 
 
 
$
40,000
 
$
100,000
 
$
140,000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
       
   Estimated Future Payouts
Under Equity Incentive Plan
Awards(1)		 All Other
Stock
Awards:
Number of Stock
or Units(2)		 Grant
Date
Fair
Value of
Stock
Awards(3)
Name Award Type Grant Date Threshold Target Maximum
Wallace E. Boston, Jr.  Restricted Stock   1/27/2015                  22,375  $775,518 
  Performance RSUs   1/27/2015   7,459   14,917   29,834       $517,023 
Richard W. Sunderland, Jr.  Restricted Stock   1/27/2015                  4,518  $156,594 
    Performance RSUs   1/27/2015   1,506   3,012   6,024       $104,395 
Karan Powell  Restricted Stock   1/27/2015                  3,000  $103,980 
  Performance RSUs   1/27/2015   1,000   2,000   4,000       $69,320 
Carol S. Gilbert  Restricted Stock   1/27/2015                  3,000  $103,980 
    Performance RSUs   1/27/2015   1,000   2,000   4,000       $69,320 
Peter W. Gibbons  Restricted Stock   1/27/2015                  2,400  $83,184 
  Performance RSUs   1/27/2015   800   1,600   3,200       $55,456 
Harry T. Wilkins  Restricted Stock   1/27/2015                  3,000  $103,980 
    Performance RSUs   1/27/2015   1,000   2,000   4,000       $69,320 

(1)These columns show the range of restricted stock unitspossible cash payouts for 2018 performance pursuant to our annual incentive plan. Actual amounts paid out pursuant to the plan are included in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table above. For a discussion of the performance goals established by the Compensation Committee for these awards, see the section titled “Annual Incentive Cash Compensation” in the Compensation Discussion and Analysis. The threshold amounts in this table represent the amounts that would have been paid if the threshold levels under each of the financial performance portion and the MBO portion of the annual incentive plan were achieved.
(2)These columns show the range of PSUs that could be earned based on 20152018 performance pursuant to the performance-based restricted stock unitsawards granted in 2015. Restricted stock units2018. PSUs earned vest over a three-year period. For a discussion of the performance goals established by the Compensation Committee for these awards, see the section titled “2015“2018 Compensation Decisions — Equity Incentives” in the Compensation Discussion and Analysis.
(2)(3)This column shows the number of shares of restricted stockRSUs granted, which vest ratably over three years.
(3)(4)Amounts reflect the grant date fair value, computed in accordance with FASB ASC Topic 718.

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Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table

Employment Agreements

For each of our NEOs other than Mr. Gibbons,Beckett and Ms. Panzarella, the amounts disclosed in the tables above are in part a result of the terms of the NEOs’ employment agreements. We do not have an employment agreementagreements with Mr. Gibbons.Beckett or Ms. Panzarella.

Dr. Boston’s Employment Agreement. In June 2004, we entered into an employment agreement with Dr. Boston to serve as our president and Chief Executive Officer with an initial term of three years starting from June 21, 2004 and ending June 21, 2007, which was subsequently amended to provide for renewal until March 31, 2018 and automatically thereafter for additional one-year terms unless we give written notice of our intent not to renew at least 30 days prior to the renewal date. In December 2008, his employment agreement was amended to provide for technical compliance with certain U.S. Department of Treasury regulations. In April 2014, his agreement was amended and restated, in part to eliminate Dr. Boston’s entitlement to tax gross-up payments in connection with a change in control. In May 2016, his agreement was again amended and restated, including to increase his annual incentive target and stretch incentive. Pursuant to his amended and restated agreement, Dr. Boston’s base salary was set at $610,000$650,000 per year, subject to annual review and adjustment by our Compensation Committee. Under the agreement, Dr. Boston’s base salary may be reduced at any time as part of a general salary reduction to all employees with annual salaries in excess of $150,000, provided, however, that any reduction shall be no more than the lesser of the median percentage salary reduction applied to such employees or 20%. Dr. Boston’s employment agreement provides that he is entitled to

42

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participate in our annual incentive plan, under which he is eligible for an annual bonus of up to 60%90% of his base salary then in effect, and up to an additional 40%45% of his base salary as then in effect based upon the achievement of certain performance goals or certain “stretch” performance goals, respectively, as determined by the Compensation Committee.

In addition to a base salary and annual bonus, Dr. Boston is entitled to receive such other benefits approved by our Compensation Committee and made available to our other senior executives and to participate in plans and receive bonuses, incentive compensation and fringe benefits as we may grant or establish from time to time. Furthermore, under Dr. Boston’s employment agreement, we are required to pay or reimburse him for customary and reasonable moving expenses he incurs in connection with any subsequent relocation of our executive offices. Dr. Boston has agreed not to compete with us nor solicit our employees for alternative employment during the term of his agreement and for a period of two years after termination for any reason.

Dr. Boston’s base salary for 20152018 and target annual incentive compensation plan award for 20152018 are set forth in the tables above.

Mr. Wilkins’sSunderland’s Employment Agreement.  Upon his hiring in February 2007, we entered into an employment agreement with Mr. Wilkins to serve as our executive vice president and chief financial officer, which agreement was amended and restated on October 10, 2007. In December 2008, his employment agreement was amended to provide for technical compliance with certain U.S. Department of Treasury regulations. In April 2014, his agreement was amended and restated, in part to eliminate Mr. Wilkins’s entitlement tax gross-up payments in connection with a change in control and also to reflect Mr. Wilkins’s current role as Executive Vice President and Chief Development Officer of APEI and Chief Executive Officer of National Education Seminars, Inc., which we refer to as Hondros College of Nursing. Pursuant to his agreement, Mr. Wilkins’s base salary was set at $335,000 per year, subject to annual review and adjustment by our Compensation Committee.

On December 18, 2015, Mr. Wilkins retired from his position at the Company and agreed to consult with the Company for a period of 18 months. For purposes of his amended and restated employment agreement, Mr. Wilkins’s departure from the Company was treated as a termination of employment by Mr. Wilkins for good reason and he was entitled to the benefits provided for in the employment agreement in that circumstance. Mr. Wilkins will continue to vest in his outstanding equity awards for an 18-month period after his retirement date.

Mr. Wilkins’s base salary for 2015 and target annual incentive compensation plan award for 2015 are set forth in the tables above.


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Mr. Sunderland’s, Dr. Powell’s and Ms. Gilbert’s Employment AgreementsAgreement. We have entered into an employment agreement with each of Mr. Sunderland Dr. Powell and Ms. Gilbert that havehas similar provisions to the provisions of Dr. Boston’s agreement discussed above, except with respect to their positions,his position, amounts relating to theirhis base salary and annual bonus, and length and scope of restrictive covenants. We entered into the employment agreement with Dr. Powell to serve as Executive Vice President and Provost on November 4, 2011 in connection with her promotion to that position. In August 2014, we entered into an employment agreementsagreement with Mr. Sunderland to serve as Executive Vice President and Chief Financial Officer, Ms. Gilbert to serve as Executive Vice President, Programs and Marketing and Dr. Powell’sOfficer. Under his employment agreement, was amended and restated.

Under their employment agreements, Mr. Sunderland’s Dr. Powell’s and Ms. Gilbert’s termsinitial term of employment each runran until March 31, 2017 and will automatically renewrenews for additional one-year terms unless we give written notice of our intent not to renew at least 30 days prior to the renewal date. Pursuant to his agreement, Mr. Sunderland’s initial annual salary was set at $300,000, subject to annual review and adjustment by our Compensation Committee. Mr. Sunderland is $300,000,eligible for an annual bonus of up to 50% of his base salary then in effect and heup to an additional 30% of his base salary as then in effect based upon the achievement of certain performance goals or certain “stretch” performance goals, respectively, as determined by the Compensation Committee. Mr. Sunderland’s base salary for 2018 and target annual incentive compensation plan award for 2018 are set forth in the tables above.

In addition, the above employment agreement provides for payments upon certain terminations of the executive’s employment. For a description of these termination provisions, whether or not following a change in control, and a quantification of benefits that would be received by these executives see the section titled “Potential Payments Upon Termination or Change in Control” below.

Mr. Dyberg’s Employment Agreement. In May 2018, we entered into an employment agreement with Mr. Dyberg to serve as Executive Vice President and Chief Technology Officer. The term of Mr. Dyberg’s employment agreement ends on March 21, 2021, and automatically renews for additional one-year terms unless we give written notice of our intent not to renew at least 30 days prior to the renewal date. Mr. Dyberg’s employment agreement has similar provisions to the provisions of Dr. Boston’s and Mr. Sunderland’s agreements discussed above, except with respect to his position, amounts relating to his base salary and annual bonus, and the length and scope of his restrictive covenants. Pursuant to his agreement, Mr. Dyberg’s initial annual salary was set at $350,000, subject to annual review and adjustment by our Compensation Committee. Mr. Dyberg is eligible for an annual bonus of up to 50% of his base salary then in effect and up to an additional 30% of his base salary as then in effect based upon the achievement of certain performance goals or certain “stretch” performance goals, respectively, as determined by the Compensation Committee. Pursuant to herhis employment agreement, Dr. Powell’s annual salary is $280,000, and she is eligible for an annualMr. Dyberg received (i) a one-time signing bonus of up$50,000, which must be returned to 50%the Company if Mr. Dyberg’s employment is terminated within the first year of herhis employment by Mr. Dyberg without good reason or by the Company with cause, as defined in the agreement, (ii) an RSU grant of 16,750 shares of the common stock of the Company and (iii) payments to cover relocation expenses in connection with his hire. Mr. Dyberg’s base salary then in effect and up to an additional 20% of her base salary as then in effect based upon the achievement of certain performance goals or certain “stretch” performance goals, respectively, as determined by the Compensation Committee. Pursuant to her agreement, Ms. Gilbert’s annual salary is $277,000, and she is eligible for an annual bonus of up to 50% of her base salary then in effect and up to an additional 20% of her base salary as then in effect based upon the achievement of certain performance goals or certain “stretch” performance goals, respectively, as determined by the Compensation Committee.

Mr. Sunderland’s, Dr. Powell’s and Ms. Gilbert’s base salaries for 20152018 and target annual incentive compensation plan awardsaward for 20152018 are set forth in the tables above.

In addition, each of the above employment agreements provides for payments upon certain terminations of the executive’s employment. For a description of these termination provisions, whether or not following a change in control, and a quantification of benefits that would be received by these executives see the section titled “Potential Payments upon Termination or Change in Control” below.43


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20152018 Outstanding Equity Awards at Fiscal Year-End

The following table sets forth information with respect to the outstanding equity awards at December 31, 20152018 for our NEOs:

 
Stock Awards
Name
Number of Shares
or Units of Stock
That Have Not Vested(1)
Market Value of Shares
or Units of Stock
That Have Not Vested ($)(2)
Wallace E. Boston, Jr.
 
138,374
 
 
3,938,124
 
Richard W. Sunderland, Jr.
 
30,951
 
 
880,865
 
Patrik Dyberg
 
16,750
 
 
476,705
 
Thomas A. Beckett
 
11,919
 
 
339,215
 
Amy N. Panzarella
 
7,670
 
 
218,288
 
     
    Stock Awards
Name Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable		 Options
Exercise
Price ($)		 Options
Expiration
Date		 Number
of Shares
or Units
of Stock
That
Have Not
Vested(1)		 Market Value
of
Shares or
Units
of Stock That
Have Not
Vested ($)(2)
Wallace E. Boston, Jr.  58,000  $37.52   1/3/2018           
  56,000  $34.80   1/4/2017           
                 66,640  $1,240,170 
Richard W. Sunderland, Jr.                 15,116  $281,309 
Karan Powell  4,625  $37.19   1/1/2016           
  5,000  $37.52   1/3/2018           
  5,500  $34.80   1/4/2017           
                 8,740  $162,651 
Carol S. Gilbert  7,800  $34.80   1/4/2017           
    6,750  $37.52   1/3/2018           
    5,988  $37.19   1/1/2016           
                   8,740  $162,651 
Peter W. Gibbons  5,000  $37.52   1/3/2018           
  4,625  $37.19   1/1/2016           
  5,500  $34.80   1/4/2017           
                 6,395  $119,011 
Harry T. Wilkins  13,000  $37.52   1/3/2018           
                   11,181  $208,078 

(1)Includes the number of shares of restricted stock unitsunderlying PSUs that were earned pursuant to the achievement of the 2015 performance-based grant of restricted stock units at 74.3% of target.2018 performance metrics, as adjusted. Of the numbers of shares of stock shown, for the officers indicated, the following numbers of shares have vested or will vest on the dates indicated:

Name
Name
Grant Date
Award Type
Vest Date
Number of Shares or
or Units of Stock That
That Have Not
Vested
Wallace E. Boston, Jr.
1/17/2016
1/20/2014
PSU
PSU
1/17/2019
1/20/2016
10,705
3,264
1/30/2017
1/20/2014
PSU
RSU
1/30/2019
1/20/2016
5,017
6,062
1/30/2017
1/21/2013
PSU
PSU
1/30/2020
1/21/2016
5,015
3,210
1/15/2018
1/21/2013
PSU
RSU
3/6/2019
1/21/2016
16,579
7,489
1/15/2018
1/27/2015
PSU
RSU
1/15/2020
1/27/2016
16,577
7,459
1/15/2018
1/27/2015
PSU
PSU
1/15/2021
3/10/2016
16,577
3,694
1/17/2016
1/20/2014
RSA
PSU
1/17/2019
1/20/2017
14,465
3,263
1/30/2017
1/20/2014
RSU
RSU
1/30/2019
1/20/2017
9,804
6,060
1/30/2017
1/27/2015
RSU
PSU
1/30/2020
1/27/2017
9,803
3,694
1/15/2018
1/27/2015
RSU
RSU
1/15/2019
1/27/2017
11,278
7,458
1/15/2018
1/27/2015
RSU
PSU
1/15/2020
1/27/2018
11,277
3,692
1/15/2018
1/27/2015
RSU
RSU
1/15/2021
1/27/2018
11,277
7,458

 

TABLE OF CONTENTS

NameGrant DateAward TypeVest DateNumber of Shares
or Units of Stock
That Have Not
Vested
Richard W. Sunderland, Jr.
1/17/2016
1/20/2014
PSU
PSU
1/17/2019
1/20/2016
2,168
602
1/30/2017
1/20/2014
PSU
RSU
1/30/2019
1/20/2016
1,016
2,785
1/30/2017
1/21/2013
PSU
PSU
1/30/2020
1/21/2016
1,014
239
1/15/2018
1/21/2013
PSU
RSU
3/6/2019
1/21/2016
3,940
574
1/15/2018
1/27/2015
PSU
RSU
1/15/2020
1/27/2016
3,938
1,506
1/15/2018
1/27/2015
PSU
PSU
1/15/2021
3/10/2016
3,938
746
1/17/2016
1/20/2014
RSA
PSU
1/17/2019
1/20/2017
2,930
602
1/30/2017
1/20/2014
RSU
RSU
1/30/2019
1/20/2017
1,985
2,784
1/30/2017
1/27/2015
RSU
PSU
1/30/2020
1/27/2017
1,984
746
1/15/2018
1/27/2015
RSU
RSU
1/15/2019
1/27/2017
2,680
1,506
1/15/2018
1/27/2015
RSU
PSU
1/15/2020
1/27/2018
2,679
746
1/15/2018
1/27/2015
RSU
RSU
1/15/2021
1/27/2018
2,679
1,506
Karan Powell
Patrik Dyberg
5/7/2018
1/20/2014
RSU
PSU
1/15/2019
1/20/2016
5,584
412
5/7/2018
1/20/2014
RSU
RSU
1/15/2020
1/20/2016
5,583
766
5/7/2018
1/21/2013
RSU
PSU
1/15/2021
1/21/2016
5,583
430
1/21/2013RSU1/21/2016956
1/27/2015RSU1/27/20161,000
1/27/2015PSU3/10/2016496
1/20/2014PSU1/20/2017412
1/20/2014RSU1/20/2017764
1/27/2015PSU1/27/2017496
1/27/2015RSU1/27/20171,000
1/27/2015PSU1/27/2018495
1/27/2015RSU1/27/20181,000
Carol S. Gilbert1/20/2014PSU1/20/2016412
1/20/2014RSU1/20/2016766
1/21/2013PSU1/21/2016430
1/21/2013RSU1/21/2016956
1/27/2015RSU1/27/20161,000
1/27/2015PSU3/10/2016667
1/20/2014PSU1/20/2017496
1/20/2014RSU1/20/2017764
1/27/2015PSU1/27/2017496
1/27/2015RSU1/27/20171,000
1/27/2015PSU1/27/2018495
1/27/2015RSU1/27/20181,000
Peter W. Gibbons1/20/2014RSU1/20/2016515
1/20/2014PSU1/20/2016277
1/21/2013PSU1/21/2016239
1/21/2013RSU1/21/2016574
1/27/2015RSU1/27/2016800
1/27/2015PSU3/10/2016534
1/20/2014RSU1/20/2017513
1/20/2014PSU1/20/2017277
1/27/2015RSU1/27/2017800
1/27/2015PSU1/27/2017534
1/27/2015RSU1/27/2018800
1/27/2015PSU1/27/2018532

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Name
Name
Grant Date
Award Type
Vest Date
Number of Shares or
or Units of Stock That
That Have Not
Vested
Harry T. Wilkins
Thomas A. Beckett
1/17/2016
1/20/2014
PSU
PSU
1/17/2019
1/20/2016
873
673
1/30/2017
1/20/2014
PSU
RSU
1/30/2019
1/20/2016
410
1,249
1/30/2017
1/21/2013
PSU
PSU
1/30/2020
1/21/2016
407
716
1/15/2018
1/21/2013
PSU
RSU
3/6/2019
1/21/2016
1,479
1,624
1/15/2018
1/27/2015
PSU
RSU
1/15/2020
1/27/2016
1,478
1,000
1/15/2018
1/27/2015
PSU
PSU
1/15/2021
3/10/2016
1,478
496
1/17/2016
1/20/2014
RSA
PSU
1/17/2019
1/20/2017
1,179
671
1/30/2017
1/20/2014
RSU
RSU
1/30/2019
1/20/2017
799
1,248
1/30/2017
1/27/2015
RSU
PSU
1/30/2020
1/27/2017
799
496
1/15/2018
1/27/2015
RSU
RSU
1/15/2019
1/27/2017
1,006
1,000
1/15/2018
1/27/2015
RSU
PSU
1/15/2020
1/27/2018
1,006
495
1/15/2018
1/27/2015
RSU
RSU
1/15/2021
1/27/2018
1,005
Amy N. Panzarella
1/30/2017
1,000
PSU
1/30/2019
410
1/30/2017
PSU
1/30/2020
407
1/15/2018
PSU
3/6/2019
863
1/15/2018
PSU
1/15/2020
862
1/15/2018
PSU
1/15/2021
862
1/17/2016
RSA
1/17/2019
908
1/30/2017
RSU
1/30/2019
799
1/30/2017
RSU
1/30/2020
799
1/15/2018
RSU
1/15/2019
587
1/15/2018
RSU
1/15/2020
587
1/15/2018
RSU
1/15/2021
586
(2)The market value of the shares of common stock that have not vested is based on the closing price on December 31, 2015 of our common stock on The NASDAQ Global Select Market $18.61.Nasdaq on December 31, 2018 (the last trading day of 2018), $28.46.

Option Exercises and Stock Vested

There were no option exercises by our NEOs during 2018. The following table sets forth information with respect to option exercises by our NEOs during 2015 and shares of restricted stock held by our NEOs that vested during 2015:2018:

 
Stock Awards
Name
Number of Shares
Acquired on Vesting (#)
Value Realized
on Vesting ($)(1)
Wallace E. Boston, Jr.
 
51,143
 
 
1,387,119
 
Richard W. Sunderland, Jr.
 
10,351
 
 
280,753
 
Patrik Dyberg
 
—
 
 
—
 
Thomas A. Beckett
 
3,260
 
 
89,803
 
Amy N. Panzarella
 
2,117
 
 
60,200
 
    
 Option Awards Stock Awards
Name Number of
Shares
Acquired
on
Exercise
(#)		 Value
Realized
on
Exercise(1)		 Number of
Shares
Acquired
on
Vesting
(#)		 Value
Realized
on
Vesting
($)(2)
Wallace E. Boston, Jr.  —   —   30,795  $1,064,067 
Richard W. Sunderland, Jr.  —   —   4,521  $156,609 
Karan Powell  9,118   169,887   3,747  $129,443 
Carol S. Gilbert  —   —   3,747  $129,443 
Peter W. Gibbons  —   —   2,559  $88,450 
Harry T. Wilkins  —   —   6,464  $223,315 

(1)The value realized on exercise is based on the difference between the exercise price of the option and the closing price of our common stock on The NASDAQ Global Select Market on the day of exercise, multiplied by the number of shares acquired.
(2)The value realized on vesting is based on the closing price of our common stock on The NASDAQ Global Select MarketNasdaq on the day of vesting, multiplied by the number of shares acquired.

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Nonqualified Deferred Compensation

The following table sets forth information with respect to each defined contribution or other plan that provides for the deferral of compensation on a basis that is not tax-qualified during 2015:2018:

Name
Executive
Contributions
in Last FY
Registrant
Contributions
for Last FY(1)
Aggregate
Earnings
in Last FY(2)
Aggregate
Withdrawals/
Distributions
Aggregate
Balance at
Last FYE(3)
Wallace E. Boston, Jr.
 
—
 
$
19,311
 
$
2,871
 
 
—
 
$
219,078
 
Richard W. Sunderland, Jr.
 
—
 
$
6,720
 
$
42
 
 
—
 
$
31,345
 
Patrik Dyberg
 
—
 
$
—
 
$
—
 
 
—
 
$
—
 
Thomas A. Beckett
 
—
 
$
1,312
 
$
(7
)
 
—
 
$
6,124
 
Amy N. Panzarella
 
—
 
$
—
 
$
(2
)
 
—
 
$
123
 
     
Name Executive
Contributions
in
Last FY		 Registrant
Contributions
in
Last FY(1)		 Aggregate
Earnings
in
Last FY(2)		 Aggregate
Withdrawals/
Distributions		 Aggregate
Balance at
Last FYE(3)
Wallace E. Boston, Jr.  —  $15,419  $(714)   —  $130,955 
Richard W. Sunderland, Jr.  —  $3,400  $(97)   —  $6,540 
Karan Powell  —  $1,429  $(107)   —  $19,182 
Carol S. Gilbert  —  $1,021  $(141)   —  $46,586 
Peter W. Gibbons  —  $—  $516   —  $34,631 
Harry T. Wilkins  —  $—  $1,777   —  $59,794 

(1)Includes amounts contributed by the Company in 20162019 with respect to 20152018 as matching contributions. All amounts are reported in the Summary Compensation Table above.
(2)Amounts reflected in this column include changes in plan values during 2015,2018, as well as any dividends and interest earned by the plan participant with regard to the investment funds chosen by such participant during the fiscal year.
(3)All amounts have been reported in the Summary Compensation Table above or in previous years.

Potential Payments Upon Termination or Change in Control

The section below describes the payments that may be made to our NEOs in connection with a change in control or pursuant to certain termination events. The employment agreements for Dr. Boston, Mr. Sunderland Dr. Powell and Ms. Gilbert,Mr. Dyberg, described above, include provisions that provide for payments to them in the event of certain terminations of their respective employment.

Mr. Gibbons doesBeckett and Ms. Panzarella do not have an employment agreement. Inagreements, but are covered by the event that Mr. Gibbons’ service to the Company terminates for any reason, he will forfeit to the Company all unvested restricted stock units and all shares of restricted stock that have not yet vested or with respect to which all applicable restrictions and conditions have not yet lapsed.Company’s Executive Severance Plan.

As described in more detail below, in the event of a voluntary resignation of an NEO (other than Mr. Gibbons) without “good reason” (as defined below), the NEO is not entitled to any payments or benefits upon such resignation other than certain accrued but unpaid salary and benefits.

Termination for cause, without good reason or by reason of death. In the event that any of Dr. Boston’s, Mr. Sunderland’s Dr. Powell’s or Ms. Gilbert’sMr. Dyberg’s employment is terminated by us for “cause”,“cause,” by the executive without “good reason”,reason,” or by reason of death (each of “cause” and “good reason” as defined below), we will pay to each of them or their estate, as the case may be, (i) his or her full base salary through the date of termination, (ii) any previously deferred and unpaid compensation and any unpaid accrued vacation pay, and (iii) any earned, but unpaid, amounts the executive is entitled to as of the date of termination in connection with any fringe benefits or under any of our incentive compensation plans or programs, including the annual incentive bonus (together, the “Base Amounts”).

In the event that Mr. Beckett’s or Ms. Panzarella’s service to the Company is terminated by us for “cause,” by the executive without “good reason,” or by reason of death (each of “cause” and “good reason” as defined below), we will pay to each of them or their estate, as the case may be, (i) his or her full base salary through the date of termination, (ii) any unpaid accrued vacation pay and unreimbursed business expenses accrued through the date of termination, (iii) any benefits provided under the Company’s employment benefit plans upon or following a termination of employment (together, the “Accrued Amounts”), and (iv) the bonus, if any, earned with respect to the calendar year ending on or preceding the termination date, to the extent not previously paid (the “Earned Bonus”).

Termination by reason of disability. If any of Dr. Boston’s, Mr. Sunderland’s Dr. Powell’s or Ms. Gilbert’sMr. Dyberg’s employment is terminated by reason of disability, we are required to pay to them, in a lump sum within 30 days of the date of termination, an amount equal to (i) his or her base salary through the date of termination, (ii) his or her annual incentive

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bonus, to the extent the Company and the executive were then satisfying applicable performance targets, adjusted for the short period through the date of termination, for such bonus, prorated for the period of the executive’s service during the applicable year, and (iii) any previously deferred and unpaid compensation and unpaid accrued vacation pay (together, the “Accrued Obligations”). In addition, subject to the executive’s timely execution of a release of claims, we are further required to pay to the executive an amount


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equal to the sum of (i) the executive’s annual base salary paid in installments in accordance with our normal payroll practices for a period of 18 months (for Mr. Dyberg and Mr. Sunderland) or 24 months (for Dr. Boston) (the “Salary Continuation Payments”) and (ii) the executive’s annual incentive bonus, to the extent the Company and the executive were then satisfying applicable performance targets, adjusted for the short period, after the date of termination to the end of the calendar year for such bonus and as to the remainder of a certainthe 18-month period (for Mr. Sunderland and Mr. Dyberg) or 24-month period (for Dr. Boston) following the date of termination (the “Bonus Period”), if net income increased from the same period in the prior year and the performance targets established for the successor executive were being satisfied for that period, paid in installments in accordance with our normal payroll practices over the Bonus Period.Period (for Dr. Boston and Mr. Sunderland) or paid in two installments, one within 60 days after the end of the year in which the termination occurred, and the second within 60 days after the end of the Bonus Period (for Mr. Dyberg) (the “Bonus Continuation Payments”). These payments shall be reduced by the sum of the amounts, if any, payable to the executive at or prior to the time of any payment under our disability benefit plans and which amounts were not previously applied to reduce any payment, all in a manner that complies with Section 409A of the Internal Revenue Code of 1986, as amended. The Bonus Periods for

If Mr. Boston, Mr. Sunderland, Dr. PowellBeckett’s or Ms. Panzarella’s employment is terminated by reason of disability, we are required pursuant to the terms of the Executive Severance Plan to pay to them the Accrued Amounts and Ms. Gilbert are 24 months, 18 months, 12 months and 12 months respectively.Earned Bonus.

Termination other than for cause or disability or for good reason. In the event that we terminate any of Dr. Boston’s, Mr. Sunderland’s Dr. Powell’s or Ms. Gilbert’sMr. Dyberg’s employment other than for cause or disability or they terminate their employment for good reason, we are required to pay, or provide, to the executive (subject to the NEO’s timely execution of a release of claims in respect of all but the first item below):, as applicable:

in a lump sum within 30 days of the date of termination, the Accrued Obligations;
an amount equal to
the sum of (i) the executive’s annual base salary and (ii) the executive’s annual incentive bonus, to the extent the Company and the executive were then satisfying applicable performance targets, adjusted for the short period, after the date of termination to the end of the calendar year for such bonus and as to the remainder of Salary Continuation Payments;
the Bonus Period, if net income increased from the same period in the prior year and the performance targets established for the successor executive were being satisfied for that period), paid in installments over the Bonus Period;Continuation Payments;
for a period of 24 months following the date of termination (for Dr. Boston) or 12 months following the date of termination (for the other NEOs)Mr. Sunderland and Mr. Dyberg) or for any longer period provided for under the terms of the appropriate plan, program, practice or policy, a continuation of benefits to the executive and/or his or her family at a level and in an amount that is at least equal to that which would have been provided by us to them had the executive continued his or her employment, provided, however, that we may elect to pay the executive a payment equal to 24 or 12 months’ (as applicable) premiums under our benefit plans in lieu of the continuation of such benefits, and provided, further, that if the executive becomes reemployed with another employer and is eligible to receive any of the benefits that had been provided by us, then the benefits we provide shall be secondary;
to the extent not otherwise paid or provided, for a period of 24 months following the date of termination (for Dr. Boston) or 12 months following the date of termination (for the other NEOs)Mr. Sunderland and Mr. Dyberg), any other amounts or benefits required to be paid or provided or which the executive is eligible to receive under any of our other existing benefit schemes; and
for Dr. Boston only, to the extent that less than 33 1/3% of all outstanding equity awards granted to him under any of our equity incentive plans are vested on the date of termination, such additional equity awards will immediately accelerate, vest, and become exercisable in accordance with their terms, assuming target level achievement for purposes of any performance-based awards.

Additionally,In the event that we terminate Mr. Wilkins’s departure from the Company on December 18, 2015 was treated as a termination ofBeckett’s or Ms. Panzarella’s employment other than for cause or disability or they terminate their employment for good reason, and he was entitledwe are required to pay, or provide, to the benefits enumerated

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executive (subject to the executive’s timely execution of a release of claims and other certain restrictive covenants): (i) the Accrued Amounts; (ii) the Earned Bonus; (iii) an amount equal to his or her base salary in effect immediately prior to the date of termination plus the product of (x) the annual cash bonus that would have been earned for the entire calendar year in which the date of termination occurs based on the actual level of achievement of any Company performance goals for such year and the higher of the actual or target level of achievement of any individual performance goals for such year; and (y) a fraction, the numerator of which is the number of days the executive was employed by the Company during the calendar year in which the date of termination occurs and the denominator of which is the number of days in such year, paid on the date that annual bonuses are paid to the Company’s executives or the 61st day following the date of termination; and (iv) any amount, determined in the sole discretion of the Committee, equal to 12 times the difference between (x) the monthly COBRA premium paid by the executive for group health plan coverage and (y) the monthly premium amount paid by the executive immediately preceding items above. Mr. Wilkins also will continueprior to vestthe date of termination for the same coverage, payable in his outstanding equity awards for an 18-month period after his retirement date.a single lump sum on the 61st day following the date of termination.

Termination following a change of control. If within 180 days after a change of control (as defined below), we terminate any of Dr. Boston’s, Mr. Sunderland’s, Dr. Powell’s or Ms. Gilbert’sMr. Dyberg’s employment other than for cause or disability or the executive terminates his or her employment for


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good reason, we are required to pay, or provide, to the executive (subject to the NEO’s timely execution of a release of claims in respect of all but the first item below):

in a lump sum within 30 days of the effective date of termination, the Accrued Obligations;
an amount equal to the sum of (i) two times the executive’s annual base salary (or, for Dr. Boston and Mr. Sunderland,(ii) two times annual base salary) and (ii) the executive’s annual incentive bonus, (or, for Dr. Boston and Mr. Sunderland, two times the annual incentive bonus), to the extent the Company and the executive were then satisfying applicable performance targets, adjusted for the short period, in a lump sum within 60 days of the effective date of termination;
for a period of 24 months following the date of termination (for Dr. Boston) or 12 months following the date of termination (for the other NEOs)Mr. Sunderland and Mr. Dyberg) or for any longer period provided for under the terms of the appropriate plan, program, practice, or policy, a continuation of benefits to the executive and/or his or her family at a level and in an amount that is at least equal to that which would have been provided by us to them had the executive continued his or her employment, provided, however, that we may elect to pay the executive a payment equal to 24 or 12 months’ (as applicable) premiums under our benefit plans in lieu of the continuation of such benefits, and provided, further, that if the executive becomes reemployed with another employer and is eligible to receive any of the benefits that had been provided by us, then the benefits we provide shall be secondary; and
to the extent not otherwise paid or provided, for a period of 24 months following the date of termination (for Dr. Boston) or 12 months following the date of termination (for the other NEOs)Mr. Sunderland and Mr. Dyberg), any other amounts or benefits required to be paid or provided or which the executive is eligible to receive under any of our other existing benefit schemes.

In the event that any amounts payable or benefits to be provided to the executive under the employment agreement or otherwise would be nondeductible to us by reason of Section 280G of the Code and would subject the executive to the excise tax imposed by Section 4999 of the Code, then such payments and/or benefits will be reduced to the extent necessary so that such payments or benefits will no longer be ineligible for deduction by reason of Section 280G of the Code or subject to the excise tax imposed by Section 4999 of the Code unless the executive would receive at least $50,000 more on a net after-tax basis if such payments and benefits were not reduced.

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If within six months after a change of control, we terminate Mr. Beckett’s or Ms. Panzarella’s employment without cause or the executive terminates his or her employment for good reason (as defined below), the executive shall be entitled to receive the Accrued Amounts and the Earned Bonus. In addition, we are required to pay to the executive (subject to the executive’s timely execution of a release of claims and other certain restrictive covenants):

an amount equal to the 1.5 times the sum of the base salary in effect, plus the executive’s target annual bonus for the year in which the date of termination occurs, payable in a single lump sum on the 61st day following the date of termination; and
an amount, determined in the sole discretion of the Committee, equal to 18 times the difference between (x) the monthly COBRA premium paid by the executive for group health plan coverage for the executive, and (y) the monthly premium amount paid by the executive immediately prior to the date of termination for the same coverage, payable in a single lump sum on the 61st day following the date of termination.

Acceleration of equity awards upon termination for death, for disability or following a change of control. Under Dr. Boston’s, Mr. Sunderland’s, Dr. Powell’s and Ms. Gilbert’sMr. Dyberg’s employment agreements, all equity awards granted to the NEO under any of our equity incentive plans that are outstanding immediately prior to the following events will vest and become fully exercisable as follows: (i) upon termination of the executive’s employment by the executive’s death; (ii) upon our termination of the executive’s employment for disability; or (iii) upon our termination of the executive’s employment, for any reason or for no reason at all, other than for disability or cause, in the 12-month period following a change of control, (a) by us for any reason other than for disability or cause, or for no reason at all, or (b) by the executive for good reason in the 12-month period following a change of control.reason. However, for purposes of clauses (i) and (ii) above, any equity awards that are subject to performance conditions for a performance period not yet completed will be deemed to be vested and exercisable in a pro-rated amount equivalent to the portion of the performance period that has passed and assuming achievement of the performance conditions for that period at the “target” level, and, for purposes of clause (iii) above, any equity awards that are subject to performance conditions for a performance period not yet completed will be deemed to be vested and exercisable in full at the “target” level.

The Executive Severance Plan does not affect the term of any outstanding equity awards. In the event Mr. Beckett or Ms. Panzarella’s employment is terminated, the treatment of any outstanding equity awards is determined in accordance with the terms of the Company equity plan or plans under which they were granted and any applicable award agreements.

Terms defined in employment agreements. For purposes of Dr. Boston’s, Mr. Sunderland’s, Dr. Powell’s and Ms. Gilbert’sMr. Dyberg’s employment agreements, the following definitions apply:

“Cause” means:

refusal by the NEO to follow a lawful written order of the Chairman of our Board, the Board, or for each NEO except Dr. Boston, our Chief Executive Officer;

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the NEO’s engagement in conduct materially injurious to us or our reputation;
dishonesty of a material nature that relates to the performance of the NEO’s duties under his or her employment agreement;
the NEO’s conviction for any crime involving moral turpitude or any felony; or
the NEO’s continued failure to perform his or her duties under his or her employment agreement (except due to the NEO’s incapacity as a result of physical or mental illness) to the satisfaction of ourthe Board for a period of at least 30 consecutive days after written notice is delivered to the NEO specifically identifying the manner in which the NEO has failed to perform his or her duties.

“Change of control” generally means:

our dissolution or liquidation, or a merger, consolidation or reorganization of us with one or more other entities in which we are not the surviving entity;

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a sale of substantially all of our assets to another person or entity; or
any transaction (including without limitation a merger or reorganization in which we are the surviving entity) which results in any person or entity owning 50% or more of the combined voting power of all classes of our stock.

“Good reason” generally means:

the assignment to the NEO of duties inconsistent in any material respect with the NEO’s position as set forth in, or in accordance with, his or her employment agreement, excluding an isolated, insubstantial and inadvertent action that we remedy promptly after receipt of notice from the NEO;
any material failure by us to comply with any provisions of the NEO’s employment agreement, excluding an isolated, insubstantial and inadvertent failure that we remedy promptly after receipt of notice from the NEO;
there is a change of control and the NEO does not continue in his or her position, or any other office he or she holds at the time of the transaction, of the most senior resulting entity succeeding to our business; or
any material failure by us to require any successor or any party that acquires control of us, whether directly or indirectly, by purchase, merger, consolidation or otherwise, or all or substantially all of our business and/or assets to assume expressly and agree to perform the NEO’s employment agreement in the same manner and to the same extent that we would be required to perform it if no succession had taken place.extent.

Provided, however, that noneNone of the foregoing constitute good reason if the executive consents in writing to such event, and none of the foregoing constitute good reason unless the NEO provides notice to us within 90 days of the initial existence of such grounds and we fail to cure the asserted grounds for good reason within 30 days of receipt of such notice from the executive.NEO. In order to terminate his or her employment for good reason, the executiveNEO must terminate employment within 30 days of the end of the cure period if the breach has not been cured.

Terms defined in the Executive Severance Plan. For purposes of the Executive Severance Plan, which currently only applies to Mr. Beckett and Ms. Panzarella, the following definitions apply:

“Cause” means:

gross negligence or willful misconduct in connection with the performance of duties;

conviction of, or pleading guilty or nolo contendere to, a criminal offense (other than minor traffic offenses); or
material breach of any term of any employment, consulting or other services, confidentiality, intellectual property, or non-competition agreements, if any, between such executive and the Company or an affiliate.

“Change of control” generally means:

the dissolution or liquidation of the Company or a merger, consolidation, or reorganization of the Company with one or more other entities in which the Company is not the surviving entity;
a sale of substantially all of the assets of the Company to another person (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act); or
any transaction (including without limitation a merger or reorganization in which the Company is the surviving entity) which results in any person owning 50% or more of the combined voting power of all classes of common stock of the Company.

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“Good reason” generally means:

a material diminution in the executive’s authority, duties or responsibilities;
a material reduction in the executive’s base salary; or
a material change in the geographic location at which the executive must perform services, including a required relocation of the executive’s principal place of employment of more than 50 miles.

Equity Retirement Policy. In July 2016, the Compensation Committee approved the Equity Retirement Policy, to be effective January 1, 2017. The Equity Retirement Policy provides for accelerated vesting at retirement of any (i) time-based awards and (ii) subject to the achievement of the applicable performance measure, performance-based awards, that were granted at least one year prior to the date of retirement. The Equity Retirement Policy applies to employees who have voluntarily terminated service, reached an age of 62 years, and provided at least 10 years of service to the Company.

The only NEO eligible for the Equity Retirement Policy in 2018 was Dr. Boston.

Payment and Benefit Estimates

The table below was prepared to reflect the estimated payments that would have been made pursuant to the employment agreements and arrangements described above. The estimated payments were calculated as though the applicable triggering event occurred, and the NEO’s employment was terminated, or the applicable change in control occurred, on December 31, 2015,2018 (the last trading day of 2018), using the closing price of our common stock on The NASDAQ Global Select MarketNasdaq of $18.61$28.46 on December 31, 2015.2018. As discussed in the narrative above, upon termination for cause or by the NEO without good reason, or upon death, the NEO is generally only entitled to receive amounts he is owed as of the termination date (e.g., salary, benefits, and, in limited cases, any previously earned, but unpaid, annual incentive compensation). Assuming a termination date of December 31, 2015,2018, these amounts are set forth in the tables above, and we have not included these earned, but unpaid amounts, in the termination events included in the table below.

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 Aggregate
Severance
Pay(1)
($)		 Accelerated
Vesting of
Equity
Awards
($)		 Welfare
Benefits
Continuation
($)		 Total
($)
Aggregate
Severance
Pay(1)
($)
Accelerated
Vesting of
Equity
Awards
($)
Welfare
Benefits
Continuation
($)
Total
($)
Wallace E. Boston, Jr.
                    
 
 
 
 
 
 
 
 
 
 
 
 
Termination by Reason of Disability $2,107,213  $1,168,764  $—  $3,275,977 
$
2,578,300
 
$
3,938,124
 
 
—
 
$
6,516,424
 
Termination other than for Cause or Disability or by Executive for Good Reason $2,107,213  $—  $42,615  $2,149,828 
$
2,578,300
 
$
1,161,861
 
$
62,666
 
$
3,802,827
 
Termination without Cause or by Executive for Good Reason in Connection with a Change in Control $1,327,213  $1,168,764  $42,615  $1,369,828 
Termination other than for Cause or by Executive for Good Reason within 180 days of a Change in Control
$
2,578,300
 
$
3,938,124
 
$
62,666
 
$
6,579,090
 
Termination other than for Cause or by Executive for Good Reason within 12 months of a Change in Control
$
2,578,300
 
$
3,938,124
 
$
62,666
 
$
6,579,090
 
Termination by Reason of Death
$
2,578,300
 
$
3,938,124
 
 
—
 
$
6,516,424
 
Richard W. Sunderland, Jr.
                    
 
 
 
 
 
 
 
 
 
 
 
 
Termination by Reason of Disability $802,153  $266,905  $—  $1,069,058 
$
924,885
 
$
880,865
 
 
—
 
$
1,805,750
 
Termination other than for Cause or Disability or by Executive for Good Reason $802,153  $—  $7,914  $810,067 
$
924,885
 
 
—
 
$
19,889
 
$
944,774
 
Termination without Cause or by Executive for Good Reason in Connection with a Change in Control $714,653  $266,905  $7,914  $989,472 
Karan Powell
                    
Termination other than for Cause or by Executive for Good Reason within 180 days of a Change in Control
$
1,233,180
 
$
880,865
 
$
19,889
 
$
2,133,934
 
Termination other than for Cause or by Executive for Good Reason within 12 months of a Change in Control
$
924,885
 
$
880,865
 
$
19,889
 
$
1,825,639
 
Termination by Reason of Death
 
—
 
$
880,865
 
 
—
 
$
880,865
 
Patrik Dyberg
 
 
 
 
 
 
 
 
 
 
 
 
Termination by Reason of Disability $462,560  $153,104  $—  $615,664 
$
787,500
 
$
476,705
 
 
—
 
$
1,264,205
 
Termination other than for Cause or Disability or by Executive for Good Reason $462,560  $—  $16,463  $479,023 
$
787,500
 
$
—
 
$
14,450
 
$
801,950
 
Termination without Cause or by Executive for Good Reason in Connection with a Change in Control $312,560  $153,104  $16,463  $482,127 
Carol S. Gilbert
                    
Termination other than for Cause or by Executive for Good Reason within 180 days of a Change in Control
$
1,050,000
 
$
476,705
 
$
14,450
 
$
1,541,155
 
Termination other than for Cause or by Executive for Good Reason within 12 months of a Change in Control
$
787,500
 
$
476,705
 
$
14,450
 
$
1,278,655
 
Termination by Reason of Death
 
—
 
$
476,705
 
 
—
 
$
476,705
 
Thomas A. Beckett
 
 
 
 
 
 
 
 
 
 
 
 
Termination by Reason of Disability $447,141  $153,104  $—  $600,245 
$
—
 
$
339,215
 
 
—
 
$
399,215
 
Termination other than for Cause or Disability or by Executive for Good Reason $447,141  $—  $10,107  $457,248 
$
462,124
 
$
339,215
 
$
18,301
 
$
819,640
 
Termination without Cause or by Executive for Good Reason in Connection with a Change in Control $302,141  $153,104  $10,107  $465,352 
Peter W. Gibbons
                    
Termination other than for Cause or by Executive for Good Reason within six months of a Change in Control
$
631,125
 
$
339,215
 
$
27,452
 
$
997,792
 
Amy N. Panzarella
 
 
 
 
 
 
 
 
 
 
 
 
Termination by Reason of Disability $—  $—  $—  $— 
 
—
 
$
218,288
 
 
—
 
$
218,288
 
Termination other than for Cause or Disability or by Executive for Good Reason $—  $—  $—  $— 
$
328,000
 
$
218,288
 
$
4,065
 
$
550,353
 
Termination without Cause or by Executive for Good Reason in Connection with a Change in Control $—  $—  $—  $— 
Termination other than for Cause or by Executive for Good Reason within six months of a Change in Control
$
350,000
 
$
218,288
 
$
6,098
 
$
574,386
 

(1)We have assumed for purposes of calculating the aggregate severance pay that our net incomefinancial performance and the NEO’s successor’s performance would be sufficient for the NEO to receive the maximum payout.

As explained above, Mr. Wilkins’s departure from the Company on December 18, 2015 was treated as a termination of employment for good reason. In addition to continuing to vest in his outstanding equity awards for an 18-month period after his retirement date, Mr. Wilkins is entitled to52


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receive severance pay in the aggregate amount of $512,700 and a continuation of his welfare benefits with an aggregate value equal to $128,175, in each case to be paid or delivered, as applicable, for the 18 months following his termination, beginning in January 2016.

Equity Compensation Plan Information

The following table summarizes the Company’s equity compensation plan information as of December 31, 2015.2018. All equity compensation plans have been approved by Company stockholders.

Plan
Number of
securities to
be issued
upon exercise
of outstanding
options
(a)
Weighted-
average
exercise price
of outstanding
options
(b)
Number of
securities
remaining
available for
future
issuance
under equity
compensation
plans
(excluding
securities
reflected in
column (a))
(c)
Equity compensation plans approved by Company stockholders
—
$
—
1,603,035
Equity compensation plans not approved by Company stockholders
—
$
—
—
Total
—
$
—
1,603,035

   
Plan Number of
securities to
be issued
upon exercise
of outstanding
options,
warrants and
rights
(a)		 Weighted-
average
exercise price
of outstanding
options
(b)		 Number of
securities
remaining
available for
future
issuance
under equity
compensation
plans
(excluding
securities
reflected in
column (a))
(c)
Equity compensation plans approved by Company stockholders  329,872  $32.65   779,266 
Equity compensation plans not approved by Company stockholders  —   —   — 
Total  329,872  $32.65   779,266 

Compensation Committee Interlocks and Insider Participation

During 2015, the members of our Compensation Committee were MG (Ret) Barbara F. Fast, Eric C. Andersen and Westley Moore. No member of our Compensation Committee has ever been an executive officer or employee of the Company. None of our executive officers currently serves, or has served during the last completed fiscal year, on the Compensation Committee or board of directors of any other entity that has one or more executive officers serving as a member of our Board or Compensation Committee.


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PROPOSAL NO. 2 — ADVISORY VOTE ON THE COMPENSATION OF
OUR NAMED EXECUTIVE OFFICERS

As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are seeking stockholder input on the compensation of our named executive officers as disclosed in this Proxy Statement. We have determined to hold this vote annually. The Board and the Compensation Committee actively monitor our executive compensation practices in light of the industry in which we operate and the marketplace for talent in which we compete. We believe that the supply of qualified executive talent is limited and have designed our compensation programs to help us attract and retain qualified candidates by offering compensation that is competitive within the for-profit education industry and the broader market for executive talent.

As described in the Compensation Discussion and Analysis beginning on page 1823 of this Proxy Statement, our executive compensation program is designed to provide competitive levels of compensation that are based on performance metrics, reflect the level of capability and effort required to achieve our corporate goals and encourage continuous quality improvement. By paying for performance, we believe that we align the interests of our executive officers with those of our stockholders. We also believe that an effective executive compensation program assists us in attracting and retaining qualified executives who will contribute to the Company’s financial performance and drive the continued creation of stockholder value.

To achieve these objectives, we adhere to the following principles:

compensation should be directly related to achievement of our corporate goals as measured through individual management objectives and through earnings results;
components of compensation should be linked to quality improvements in the satisfaction and success of our students;
an emphasis on equity-based compensation aligns the long-term interests of executive officers and stockholders; and
NEO’s compensation must be evaluated against opportunities offered by companies that are similar to, and competitive with, us in the market for executive talent.

Our executive compensation program also includes features specifically intended to align the interests of our NEOs andwith those of our stockholders, such as:

each of our executives is expected to own shares of the Company’s common stock with a value ranging from one to six times the executive’s base salary, depending on position;
the use of equity awards, the value of which is contingent on our long-term performance; and
time-based vesting provisions, which allow our equity awards to vest in one-third equal installments on the first three anniversaries of the grant date; and
equity awards are comprised of a mixture of restricted stock awardsRSUs that vest over three years and restricted stock unitsPSUs that vest over three years, subject to achievement of a free cash flow target.

We believe our executive compensation program achieves our compensation principles, properly aligns the interests of our NEOs and our stockholders and is deserving of stockholder support. We believe that stockholders should also consider the following when determining whether to approve the compensation of our NEOs as presented in this Proxy Statement:

the Compensation Committee utilizes Willis Towers Watson, an independent compensation consulting firm, to assist the Committee in determining compensation;
our NEOs are prohibited from engaging in short sales, transactions in derivative securities (including put and call options), or other forms of hedging and monetization transactions, such as zero-cost collars, equity swaps, exchange funds and forward sale contracts, that allow the holder to limit or eliminate the risk of a decrease in the value of our securities;

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our equity awards have been granted with three-year minimum vesting periods, and our equity plans prohibit repricing or replacement of outstanding option awards;
for our NEOs for whom we have employment agreements,
upon a “change of control” the NEOs only receive severance payments in connection with a termination of their employment; and

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the employment agreements with our NEOs do not include tax-gross up payments in connection with a “change of control”.control.”

For these reasons, the Board recommends that stockholders vote in favor of the following resolution:

“RESOLVED, that the compensation paid to the American Public Education, Inc. named executive officers, as disclosed in the Company’s Proxy Statement for the 20162019 Annual Meeting pursuant to the rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and any other related disclosure, is hereby APPROVED.”

The vote is advisory and is not binding on the Company, the Board or the Compensation Committee of the Board. However, the Compensation Committee of the Board expects to take into account the outcome of the vote as it continues to consider our executive compensation program. The Board has determined that future advisory votes on the compensation of the Company’s NEOs will be held every year, in accordance with the results of the advisory vote of the Company’s stockholders on such frequency at the Company’s 2011 Annual Meeting. Thus, the next stockholder advisory vote on the compensation of our NEOs and the next stockholder advisory vote on the frequency of the advisory vote on the compensation of our NEOs will be held at the Company’s 2017 Annual Meeting.

THE BOARD RECOMMENDS A VOTE FOR THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT.

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PROPOSAL NO. 3 — RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We are asking our stockholders to ratify the Audit Committee’s appointment of RSM USDeloitte & Touche LLP (“RSM”Deloitte”) (f/k/a McGladrey LLP) as our independent registered public accounting firm for the fiscal year ending December 31, 2016. 2019.

In 2018, the Audit Committee undertook a competitive review process to select our independent registered public accounting firm for the year ended December 31, 2018. In conducting this process, the Audit Committee invited several independent registered public accounting firms to submit proposals for their services and to provide detailed information on their firms. On June 11, 2018, following the conclusion of this process, the Audit Committee approved the engagement of Deloitte as our independent registered public accounting firm for the fiscal year ending December 31, 2018, and dismissed RSM as our independent registered public accounting firm. The Audit Committee has again selected Deloitte as our independent registered accounting firm for the year ended December 31, 2019 and believes that the retention of Deloitte for the 2019 fiscal year is in the best interest of the Company and its stockholders.

The Audit Committee has ultimate authority and responsibility for the appointment, termination, compensation, evaluation, and oversight of our independent registered public accounting firm and annually evaluates the performance of our independent registered public accounting firm. The Audit Committee also evaluates and approves the selection of the lead engagement partner.

Although ratification is not required by our Bylaws or otherwise, the Board is submitting the appointment of RSMDeloitte to our stockholders for ratification as a matter of good corporate practice. If the appointment is not ratified, the Audit Committee will consider whether it is appropriate to select another registered public accounting firm. Even if the appointment is ratified, the Audit Committee in its discretion may select a different registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and our stockholders.

The Board first approved RSM as our independent auditor in October 2007, and RSM has continued to audit our financial statements, including for the fiscal year ended December 31, 2015. Representatives of RSMDeloitte are expected to be present at the Annual Meeting. They will be given an opportunity to make a statement at the meeting if they desire to do so, and they will be available to respond to appropriate questions.

THE BOARD RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF RSMDELOITTE AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2016.2019.


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Principal Accountant Fees and Services

We regularly review the services and fees of our independent accountants. These services and fees are also reviewed by the Audit Committee on an annual basis. The following table summarizes the aggregate fees billed by Deloitte for the fiscal yearsyear ended December 31, 20152018 and, 2014 for each ofcomparison purposes, the following categories of services are as follows:aggregate fees billed by RSM for the fiscal year ended December 31, 2017.

Fee Category
2018
2017
Audit Fees
$
611,359
 
$
545,475
 
Audit-Related Fees
$
—
 
$
83,500
 
Tax Fees
$
—
 
$
—
 
All Other Fees
$
283,700
 
$
83,500
 
Total Fees
$
895,059
 
$
686,700
 
  
Fee Category 2014 2015
Audit Fees $537,916  $468,550 
Audit-Related Fees $95,000  $9,000 
Tax Fees $—  $— 
All Other Fees $5,000  $— 
Total Fees $637,916  $477,550 

Audit Fees. Consist of fees billed for professional services rendered for the audit of our annual financial statements and review of financial statements included in our Quarterly Reports on Form 10-Q and services provided in connection with statutory and regulatory filings or engagements.

Audit-Related Fees. Consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit Fees.”

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Tax Fees. Consist of fees billed for tax compliance, tax advice and tax planning services and include fees for tax return preparation.

All Other Fees. Consist of fees billed for products and services other than those described above under Audit Fees, Audit-Related Fees and Tax Fees. In 2014, these fees wereFees, including advisory services related to services in connection with our acquisition of National Education Seminars, Inc., which we refer to as Hondros College of Nursing.potential acquisitions.

During the fiscal yearsyear ended December 31, 2015 and 2014, RSM2018, Deloitte provided various services in addition to auditing our financial statements. The Audit Committee has determined that the provision of such services is compatible with maintaining RSM’sDeloitte’s independence. In 2015 and 2014,2018, all fees paid to RSMDeloitte were pre-approved pursuant to the policy described below.

Audit Committee’s Pre-Approval Policies and Procedures

The Audit Committee reviews with RSMDeloitte and management the plan and scope of RSM’sDeloitte’s proposed annual financial audit and quarterly reviews, including the procedures to be utilized and RSM’sDeloitte’s compensation. The Audit Committee also pre-approves all auditing services, internal control related services and permitted non-audit services (including the fees and terms thereof) to be performed for us by RSM,Deloitte, subject to the de minimis exception for non-audit services that are approved by the Audit Committee prior to the completion of an audit. The Audit Committee may delegate pre-approval authority to one or more members of the Audit Committee consistent with applicable law and listing standards, provided that the decisions of such Audit Committee member or members must be presented to the full Audit Committee at its next scheduled meeting. All of the RSM services in 2017 and 2018 and all of the Deloitte services in 2018 were pre-approved by the Audit Committee in accordance with this policy.

Additional Information Regarding Change of Independent Registered Accounting Firms

The audit reports of RSM on the financial statements of the Company as of and for the years ended December 31, 2017 and 2016 did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles.

During the fiscal years ended December 31, 2017 and 2016, and the subsequent interim period through June 11, 2018, there were no: (i) “disagreements,” as that term is defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions, between the Company and RSM on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of RSM, would have caused RSM to make reference in connection with their opinion to the subject matter of the disagreement; or (ii) “reportable events” as that term is defined in Item 304(a)(1)(v) of Regulation S-K. During the fiscal years ended December 31, 2017 and 2016 and the subsequent interim period through June 11, 2018, neither the Company nor anyone acting on its behalf consulted Deloitte with respect to: (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements, and neither a written report was provided to the Company nor oral advice was provided to the Company that Deloitte concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was the subject of either a disagreement as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions or a reportable event as described in Item 304(a)(1)(v) of Regulation S-K.

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AUDIT COMMITTEE REPORT

THE FOLLOWING REPORT OF THE AUDIT COMMITTEE DOES NOT CONSTITUTE SOLICITING MATERIAL AND SHOULD NOT BE DEEMED FILED OR INCORPORATED BY REFERENCE INTO ANY OTHER FILING BY US UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES EXCHANGE ACT OF 1934, EXCEPT TO THE EXTENT WE SPECIFICALLY INCORPORATE THIS REPORT.

During 2015,2018, the Audit Committee of the Board of Directors of American Public Education, Inc. consisted entirely of independent directors: Ms. Halle, who serves as the chairperson, Mr. Andersen, Mr. LandonDr. Kurshan, and Mr. Weglicki.Landon. The Audit Committee operates under a written charter adopted by the Board, which is available in the “Governance — Governance — Committeesand Ethics Documents” section of our corporate website, which iswww.americanpubliceducation.com.www.apei.com. The information on our corporate website is not incorporated by reference into the Proxy Statement for the 20162019 Annual Meeting of Stockholders. The Audit Committee reviews the charter and proposes necessary changes to the Board on an annual basis.

ForDuring the fiscal year ended December 31, 2015,2018, the Audit Committee fulfilled its duties and responsibilities generally as outlined in its charter. The Audit Committee:

reviewed and discussed with management our audited financial statements for the fiscal year ended December 31, 2015;2018;
discussed with RSM USDeloitte & Touche LLP, our independent auditors for the fiscal year ended December 31, 2015,2018, the matters required to be discussed by the Statement on Auditing Standards No. 16, Communication with Audit Committees, as amended, as adopted by theunder applicable Public Company Accounting Oversight Board in Rule 3200T;standards; and
received the written disclosures and the letter from the independent auditorsDeloitte & Touche LLP required byunder applicable requirements of the Public Company Accounting Oversight Board standards regarding the independent auditors’ communications with the Audit Committee concerning independence, and has discussed with the independent auditors their independence.

On the basis of the reviewsreview and discussions referenced above, the Audit Committee recommended to the Board that the audited financial statements be included in American Public Education’sEducation Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 20152018 for filing with the Securities and Exchange Commission. In addition, the Audit Committee has appointed, subject to stockholder ratification, Deloitte & Touche LLP as our independent registered public accounting firm for fiscal year 2019.

AUDIT COMMITTEE (February 25, 2016)(March 6, 2019)
   

Jean C. Halle, Chairperson
Eric C. Andersen
Dr. Barbara L. Kurshan
Timothy J. Landon
Timothy T. Weglicki

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires our directors, executive officers, and holders of more than 10% of our common stock to file reports of ownership of our equity securities. To our knowledge, based solely on review of the copies of such reports furnished to us related to the year ended December 31, 2015,2018, all such reports were made on a timely basis, except that the following Section 16 reporting personsDr. Wallace E. Boston, Jr., Richard W. Sunderland, Jr., Patrik Dyberg, Thomas Beckett, and Amy Panzarella each failed to timely file Formsone Form 4 for such number of transactions as indicated: Ms. Halle (1); Mr. Landon (1); and Mr. Weglicki (1).reporting one transaction.

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BENEFICIAL OWNERSHIP OF COMMON STOCK

The following table sets forth certain information as of April 26, 2016March 22, 2019 (unless otherwise specified), with respect to the beneficial ownership of our common stock by each person who is known to own beneficially more than 5% of the outstanding shares of common stock, each person currently serving as a director, each nominee for director, each NEO (as set forth in the Summary Compensation Table above), and all directors and executive officers as a group:

Name of Beneficial Owner
Shares of
Common
Stock
Beneficially
Owned(1)
Percentage of
Class
More than 5% Stockholders
 
 
 
 
 
 
T. Rowe Price Associates, Inc.(2)
 
2,984,187
 
 
18.0
%
BlackRock, Inc.(3)
 
2,380,988
 
 
14.4
%
Dimensional Fund Advisors LP(4)
 
1,368,622
 
 
8.3
%
Renaissance Technologies, LLC(5)
 
1,305,393
 
 
7.9
%
The Vanguard Group, Inc.(6)
 
1,265,593
 
 
7.6
%
Directors and Named Executive Officers
 
 
 
 
 
 
Eric C. Andersen
 
10,275
 
 
 
*
Thomas A. Beckett
 
4,660
 
 
 
*
Dr. Wallace E. Boston, Jr.
 
322,617
 
 
1.9
%
Patrik Dyberg
 
3,730
 
 
 
*
MG (Ret) Barbara G. Fast
 
16,140
 
 
 
*
Jean C. Halle
 
21,207
 
 
 
*
Dr. Barbara L. Kurshan
 
8,930
 
 
 
*
Timothy J. Landon
 
15,134
 
 
 
*
Amy N. Panzarella
 
5,322
 
 
 
*
William G. Robinson, Jr.
 
6,808
 
 
 
*
Richard W. Sunderland, Jr.
 
32,600
 
 
 
*
All of our directors and executive officers as a group (11 persons)
 
447,573
 
 
2.7
%
  
Name of Beneficial Owner Shares of
Common
Stock
Beneficially
Owned(1)		 Percentage of
Class
More than 5% Stockholders
          
T. Rowe Price Associates, Inc.(2)  2,658,830   16.56% 
BlackRock, Inc.(3)  1,584,912   9.87% 
Invesco Ltd.(4)  1,340,736   8.35% 
The Vanguard Group, Inc.(5)  1,263,883   7.87% 
Wellington Management Group LLP(6)  1,111,742   6.92% 
Directors and Named Executive Officers
          
Eric C. Andersen  6,362   * 
Dr. Wallace E. Boston, Jr.  443,623   * 
Barbara G. Fast  36,332   * 
Peter W. Gibbons  9,332   * 
Carol S. Gilbert  73,223   * 
Jean C. Halle  19,935   * 
Barbara Kurshan  3,646   * 
Timothy J. Landon  14,142   * 
Westley Moore  4,771   * 
Dr. Karan Powell  35,545   * 
Richard W. Sunderland, Jr.  26,316   * 
Timothy T. Weglicki(7)  36,943   * 
Harry T. Wilkins  36,200   * 
All of our directors and executive officers as a group
(13 persons)		  750,710   4.68% 

*Represents beneficial ownership of less than 1%.
(1)Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of common stock subject to options or warrants currently exercisable or exercisable within 60 days of April 26, 2016 are deemed outstanding for purposes of computing the percentage ownership of the person holding such options, but are not deemed outstanding for purposes of computing the percentage ownership of any other person. Except where indicated otherwise, and subject to community property laws where applicable, the persons named in the table above have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them. As of April 26, 2016March 22, 2019, there were 16,056,41916,586,160 shares of common stock outstanding.
(2)Based solely on a Schedule 13G/A filed by T. Rowe Price Associates, Inc. on February 11, 2016.14, 2019. The stockholder’s address is 100 E. Pratt Street, Baltimore, Maryland 21202. The stockholder is deemed to be the beneficial owner with sole dispositive power of 2,658,830with respect to 2,984,187 shares of the Company’s stock as the result of being an investment advisor. The stockholder has sole voting power with respect to 532,510 of these721,483 shares, and T. Rowe Price Small-Cap Value Fund, Inc., for which T. Rowe Price Associates, Inc. serves as investment adviser, has sole voting power with respect to 1,305,160 shares.

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(3)Based solely on a Schedule 13G/A filed by BlackRock, Inc. on January 25, 2016.24, 2019. The stockholder’s address is 55 East 52nd52nd Street New York, NYNew York 10055. This stockholder is deemed to be the beneficial owner of 1,584,912with sole dispositive power with respect to 2,380,988 shares of the Company’s common stock as a result of being a parent holding company or control person. The stockholder has sole voting power with respect to 1,545,0492,338,414 of these shares.

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(4)Based solely on a Schedule 13G/A filed by Invesco Ltd.Dimensional Fund Advisors LP on February 3, 2016.8, 2019. The stockholder’s address is 1555 Peachtree Street NE, Atlanta, GA 30309. ThisBuilding Once, 6300 Bee Cave Road, Austin, Texas, 78746. The stockholder is deemed to be the beneficial owner with sole dispositive power with respect to 1,368,622 shares of 1,340,736the Company’s stock as the result of acting as an investment advisor. The stockholder has sole voting power with respect to 1,290,536 of these shares.
(5)Based solely on a Schedule 13G/A filed by Renaissance Technologies LLC (“RTC”) and Renaissance Technologies Holdings Corporation (“RTHC”) on February 13, 2019. The stockholders’ address is 800 Third Ave, New York, New York, 10022. RTC is deemed to be the beneficial owner of these shares of the Company’s common stock as a result of being a parent holding company or control person and/or acting as an investment adviser.advisor, and RTHC as a result of its majority ownerhship of RTC. RTC and RTHC have sole voting power with respect to 1,262,293 of these shares, sole dispositive power with respect to 1,271,520 of these shares and shared dispositive power with respect to 33,873 of these shares.
(5)(6)Based solely on a Schedule 13G/A filed by The Vanguard Group, Inc. on February 10, 2016.11, 2019. The stockholder’s address is 100 Vanguard Blvd., Malvern, PA 19355. This stockholder is deemed to be the beneficial owner with sole dispositive power of 1,243,456with respect to 1,249,060 shares of the Company’s common stock and has shared dispositive power of 20,427with respect to 16,543 shares the Company’s common stock as a result of acting asbeing an investment adviser. The stockholder has sole voting power with respect to 22,02716,681 of these shares.
(6)Based solely on a Schedule 13G/A filed by Wellington Management Group LLP on January 11, 2016. The stockholder’s address is c/o Wellington Management Company LLP, 280 Congress Street, Boston, MA 02210. The stockholder is deemed to be the beneficial owner with shared dispositive power of 1,111,742 shares of the Company’s stock as the result of being an investment advisor. The stockholder hasand shared voting power with respect to 985,6241,335 of these shares, and does not have sole voting or dispositive power with respect to any of the shares.
(7)Includes 5,192 shares owned by The Timothy T. Weglicki Irrevocable Trust dated March 11, 1999 (the “Trust”), which shares Mr. Weglicki disclaims beneficial ownership of except to the extent of his pecuniary interest therein.

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GENERAL MATTERS

Availability of Certain Documents

A copy of our 20152018 Annual Report on Form 10-K has been posted on the Internet along with this Proxy Statement to all stockholders entitled to notice of and to vote at the Annual Meeting. The Annual Report is not incorporated into this Proxy Statement and is not considered proxy-soliciting material. We will mail without charge, upon written request, a copy of our 20152018 Annual Report on Form 10-K including exhibits. Please send a written request to our Corporate Secretary at:

American Public Education, Inc.
111 W. Congress Street
Charles Town, West Virginia 25414
Attention: Corporate Secretary

The charters for our Audit, Compensation, and Nominating and Corporate Governance Committees, as well as our Guidelines and our Code of Ethics, are in the Governance section of our corporate website, which iswww.americanpubliceducation.comwww.apei.com, and are also available in print without charge upon written request to our Corporate Secretary at the address above. The information on our corporate website is not incorporated by reference into this Proxy Statement.

Stockholders residing in the same household who hold their stock through a bank or broker may receive only one set of proxy materials in accordance with a notice sent earlier by their bank or broker. This practice will continue unless instructions to the contrary are received by yourthe bank or broker from one or more of the stockholders within the household. We will promptly deliver a separate copy of the proxy materials to such stockholders upon receipt of a written or oral request to our Corporate Secretary at the address above, or by calling (304) 724-3700.

If you hold your shares in “street name” and reside in a household that received only one copy of the proxy materials, you can request to receive a separate copy in the future by following the instructions sent by your bank or broker. If your household is receiving multiple copies of the proxy materials, you may request that only a single set of materials be sent by following the instructions sent by your bank or broker.

Stockholder Proposals and Nominations

Requirements for Stockholder Proposals to be Considered for Inclusion in our Proxy Materials. ToAs required be SEC rules, in order to be considered for inclusion in next year’s proxy statement, stockholder proposals must be received by our Corporate Secretary at our principal executive offices not less than 120 calendar days before the anniversary of the date the proxy statement is released to stockholders in connection with the previous year’s annual meeting, which is no later than the close of business on December 29, 2016.November 30, 2019.

Requirements for Stockholder Proposals to be Brought Before an Annual Meeting. Our Bylaws provide that, for stockholder nominations to the Board or other proposals to be considered at an annual meeting, the stockholder must have given timely notice thereof in writing to the Corporate Secretary at American Public Education, Inc., 111 W. Congress Street, Charles Town, West Virginia 25414, Attn: Corporate Secretary. To be timely for the 20172020 Annual Meeting, the stockholder’s notice must be delivered to or mailed and received by us not more than 120 days, and not less than 90 days, before the anniversary date of the preceding annual meeting, except that if the annual meeting is set for a date that is not within 30 days before or 60 days after such anniversary date, we must receive the notice notno later than the later of the 90th day prior to such annual meeting or the close of business on the tenth day following the day on which we provide notice or public disclosure of the date of the meeting. Assuming the date of our 20172020 annual meeting is not so advanced or delayed, stockholders who wish to make a proposal at the 20172020 annual meeting must notify us no earlier February 17, 2017than January 11, 2020 and no later than March 19, 2017.February 10, 2020. Such notice must provide the information required by our Bylaws with respect to each matter the stockholder proposes to bring before the 20172020 Annual Meeting.


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Other Matters

As of the date of this Proxy Statement, the Board does not intend to present any matters other than those described herein at the Annual Meeting and is unaware of any matters to be presented by other parties. If other matters are properly brought before the meeting for action by the stockholders, proxies will be voted in accordance with the recommendation of the Board or, in the absence of such a recommendation, in accordance with the judgment of the proxy holder.

Directions to Annual Meeting

Directions to the 20162019 Annual Meeting of Stockholders, to be held at the Gaylord National Resort and Convention Center, 201 Waterfront Street, National Harbor, Maryland 20745, are set forth below:

From Points North or South via I-95 — Follow I-95 into the Washington, D.C. area and merge onto I-95/I-495 (Capital Beltway). Cross the Woodrow Wilson Bridge toward Maryland and continue to exit 2A toward National Harbor. Once on National Harbor property, turn right onto St. George Boulevard and follow signs to the Gaylord National Hotel and Convention Center.

By Order of the Board of Directors,

[GRAPHIC MISSING]

Dr. Wallace E. Boston, Jr.
By Order of the Board of Directors,
 
Dr. Wallace E. Boston, Jr.
President and Chief Executive Officer

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[GRAPHIC MISSING] 

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